Analysis of a Digitally Driven Business Model and Its Lessons — A Case Study of Luckin Coffee

Abstract

Luckin Coffee’s trajectory—from explosive growth in its early years, through bankruptcy restructuring following a financial fraud scandal, to achieving comprehensive profitability and continued expansion—constitutes a landmark case in China’s new-consumption sector. This paper focuses on Luckin’s OMO (Online Merge Offline) new-retail business model, which is characterized by “technology-driven, data-enabled, highly efficient operations,” and, drawing on its latest financial figures (total revenue of RMB 24.903 billion in 2023 and net profit of RMB 2.848 billion) and operational practices, systematically analyzes its core competitive advantages, success factors, and potential challenges. The study finds that Luckin has restructured the coffee consumption chain around digitalization, building unique business barriers through deep private-domain user operations, extreme supply-chain efficiency, and agile product innovation. Its experience offers important references for the digital transformation of traditional retail and the globalization of Chinese brands, while also revealing critical pathways for new-consumption brands to achieve sustainable development in the digital era.