Luckin Coffee's financial fraud has sparked a crisis of confidence among international investors in Chinese companies. In his latest presentation, leading Chinese entrepreneur Yu Minhong slammed Luckin Coffee.
Luckin Coffee is a classic example of a company with financial fraud that is a disgrace to the Chinese people," Yu said.
Yu, chairman of the US-listed New Oriental Education Technology Group, made the remarks in a speech given at a event in Qingdao that was centered on the challenges facing Chinese companies.
Yu said that no matter what challenges arise, a company that sticks to the right path is fundamental to its success today.
He argued that the Luckin Coffee falsification case was shameful and that, in contrast, New Oriental had never made up false data, although it had been attacked by short-sellers.
He said:
I'm quite proud of myself on this point, because New Oriental has also been attacked by Muddy Waters (a short seller), but now New Oriental has always been considered a company with accurate data.
Because in our history, we really have never made up a false data. Only when we are sticking to the right stuff, can we talk about getting by in the middle of a challenge.
It's worth noting that Luckin Coffee's single store cash flow has now turned positive, with over 4,000 stores returning to normal operations.
"So far, it seems that Luckin Coffee stores are operating normally and are still launching new products. They have also recently launched the Haagen-Dazs range and judging from the market response, consumers have responded well," Chinese media said citing sources close to the company.
Luckin Coffee stopped its strategy of rapid expansion to capture the market over the past 2 years and shifted to creating profitability through fine-tuned operations. Luckin Coffee also achieved 99.89% customer satisfaction in the first half of the year, according to earlier reports.
