[Starbucks Killer?] Luckin Coffee to have 2,000 stores by end of year

[TaiShang]

Luckin Coffee to have 2,000 stores by end of year

China.org.cn, August 2, 2018

China's startup Luckin Coffee will have 2,000 stores by the end of this year, more than doubling its current locations, the company announced at a press conference Wednesday.

Luckin Coffee holds a press conference on Aug. 1 in Beijing. [Photo/China.org.cn]
The expansion move came after a fund raising of US$200 million in a Series A financing round on July 11, which valued the company at US$1 billion.

In seven months after its launch on a trail base in January, the company has opened 809 stores across 13 cities in China, selling more than 18 million cups of coffee with a customer base of more than 3.5 million.

The fast-growing company also planned to expand its business to light meals and snacks, as it will partner with UK-based Bakkavor, U.S.-based Bama Companies Inc. and China's food group COFCO Corp as its suppliers.

To increase its foothold and market share, all stores will offer a 50 percent discount for both delivery and pick-up of food items, includingsandwiches, muffins, and salads, from Aug. 1 to Dec. 31, the company said.

"Light snacks are natural companions of coffee as a key part of coffee business, and have a great potential,"said Guo Jinyi, co-founder and senior vice president of Luckin Coffee."We hope to help customers develop habits for light meals through subsidies."

Luckin Coffee was founded by Qian Zhiya, former COO of UCAR, one of China's biggest car rental services.

Considered as an emerging rival to Starbucks in the Chinese market, Luckin Coffee has provided customers with delivery services since its launch by working with a local delivery company.

After placing orders online, customers can choose to either pick them up in nearby stores or have them delivered within 30 minutes.

"The average delivery time of each Luckin order is now about 18 minutes,"said Guo.

***

Starbucks sees rare fall in profits in China in 3rd quarter

China Plus Published: 2018-08-01

According to news portal 163.com, Starbucks in China reported a 7.6 percent decline in profit in the 3rd quarter, said to be the first fall in profit for the company in the China market in nine years. Starbucks has so far not commented on its financial performance in China, said 163.com.

***

Now that China's approaching/has approached middle-income status, service-based industries are emerging. And, once they dominate domestic market, they already become a global-sized company.

From now on, the US will start to whine and scream as they lose domination on many services-based industries to China from retailers to drink and food vendors.

I anticipate China now generating its own Wal-Mart size bricks-and-mortar national champions (at least two).

I, therefore, want the US to continue the economic war at this crucial time as China transition services-based consumption economy because trade war will, first, force more services-based innovative business, second, will change people's attitude US goods and services in China negatively.

In the end, Win-Win. China wins, and then China wins again.

@AndrewJin , @Jlaw , @JSCh , @antonius123 , @powastick

 

[qwerrty]

i bet this company is probably praying for trade war

 

[atan651]

All the best to Luckin and I hope one day it will displace and kick out Starbuck from China, the sooner the better.

 

[TaiShang]

i bet this company is probably praying for trade war

All the best to Luckin and I hope one day it will displace and kick out Starbuck from China, the sooner the better.

The trade war would not come at a better time.

Luckin is smart. It is said that Luckin has been running a very aggressive growth strategy, including opening stores next to/near to Starbucks and engaging into a very aggressive pricing competition.

Luckin's entire strategy is based on kicking Starbucks out of China.

It makes sense, especially in the midst of a en economic war, people prefer to go to Luckin instead of Starbucks.

 

[Night_Fury]

great. would love to see a store open in Islamabad.

 

[khanmubashir]

The new companies should also. Bring some new innovation in there services.which makes them different from. Competition

 

[powastick]

Starbuck 10 bucks a cup is downright robbery.

 

[xyxmt]

I prefer Satar Bakhsh

 

[aman_rai0007]

Tata is also involved in Starbucks... So a funding of 200 million is not going to challenge it

 

[Jlaw]

Starbuck 10 bucks a cup is downright robbery.

In Malaysia?

 

[TheTruth]

No reason why the government can't shut down every single Starbucks in China and transfer them to Luckin within a week.

 

[powastick]

In Malaysia?

yes

 

[Nan Yang]

yes

Might be cheaper here.

 

[Jlaw]

Might be cheaper here.

Great place. 100% Arabica coffee for $1

yes

You folks getting fleeced

 

[TaiShang]

Luckin does food delivery after Starbucks coffee delivery rumors

2018-08-02 11:18

By Runhua Zhao

China’s “new retail” startup Luckin Coffee announced today to accelerate and expand its business in light meals and snacks. The news comes just days after rumors that Luckin’s biggest competitorStarbucks is planning to deliver coffeewith the help of Alibaba-owned food delivery platform Ele.me.

During its press event on August 1st, Luckin introduced a price comparison graphics showing that its food would be priced RMB 1-5 lower than its competition, local mediareports (in Chinese). Though the company did not specify the competitor’s name, the industry suspects it’s highly likely to be Starbucks since the prices are strikingly similar.

Starbucks has seen its figures go down after its fast-rising competitor introduced a combination of in-shop and online shopping experiences originally created by Alibaba. Luckin has also managed to create additional buzz for itself by threatening Starbucks with an unfair competition lawsuit.

The comparison also implies that one of Luckin’s core strengths is quality at a low price. CEO Qian Zhiya once said Luckin has invested over RMB 1 billion since its formal debut in May, the majority of which went to subsidiaries.

The subsidy push will continue. Luckin said that from today to December 31, all stores around the country would offer a 50% discount for both delivery and pick-up of food items in order to cultivate purchasing habits and increase market share. Food items include sandwiches, muffins, and salads.

Read more: How Luckin Coffee is reforming China’s coffee culture

Prior to today’s announcement, Luckin already started a low-profile pilot of its food business. A Luckin barista who wishes to remain anonymous told TechNode that in some Luckin coffee shops, light meals are sold out before 12 PM.

“The business is hugely internet-based, and most people choose the delivery service. This means our shops are not initially built with much consideration of in-shop experience, at least at this stage,” he said.

To maintain cost, most shops are small, and refrigerators and devices for food give way to the main business coffee. To increase food supply most sites would have to upgrade their basic infrastructure. TechNode found that in some Luckin stores in Beijing food items have already run out by early afternoon.

“We can’t store that much food so it runs out fast. To ensure freshness and quality, we only sell what we get from the morning,” said the Luckin barista.

According to Luckin, by the end of July, the company has set up 809 coffee shops and sold over 18 million cups of coffee in China. Guo Jinyi, co-founder and senior vice president at Luckin says the plan is to have built 2,000 shops by the end of this year. The coffee startup’s strong performance is under close watch by its competitors including Starbucks.

http://www.sohu.com/a/244751314_465957