Luckin Coffee, once hailed as China’s homegrown rival to Starbucks, has found itself in seriously hot water. The chain was forced to file for bankruptcy earlier last month amid claims it engaged in the phenomenon of “adding water.” The term “adding water,” or jia shuifen, harkens to a practice of manipulating accounting statistics to create false narratives. In Luckin’s case, it involved the alleged fabrication of more than US$340million in revenue to give investors the impression it was experiencing miraculous growth. It is an ignoble end to a company that grew at record-breaking speed and - if only for a brief period - represented the global ambitions of many homegrown Chinese brands.
Mar 03, 2021