'Luckin' for Gold: Chinese Coffee Company Eyeing Huge IPO

By Ryan Gandolfo, May 7, 2019

0 0

Chinese start-up Luckin Coffee is aiming to raise over USD587 million (RMB3.9 billion) in their upcoming initial public offering (IPO), according to multiple reports.

Arguably Starbuck’s biggest competitor in the PRC, the Chinese coffee brand has expanded at breakneck speed over the last two years. Since their first Beijing store launched in June 2017, the company has opened over 2,300 stores, operating in 28 cities around the Middle Kingdom.

According to an April 22 filing with the US Securities and Exchange Commission (SEC), Luckin Coffee sold approximately 90 million cups of joe in 2018 and has had over 16 million transacting customers since its inception.

The company plans to use this massive influx of cash for “general corporate purposes,” such as store network expansion, customer acquisition and research and development. According to a Financial Times article, Luckin plans to surpass Starbucks, in terms of number of outlets in China, by the end of 2019 (Starbucks currently has more than 3,300 locations in China).

Luckin’s market strategy has largely been focused on attracting customers with significant discounts and celebrity endorsements, using delivery as their main channel to connect with customers. We can attest to the former, opting for the cheap java from time to time when our digital wallets are feeling light.

But whether this strategy is enough to overtake the Seattle-based coffee powerhouse remains to be seen.

In the first quarter of 2019, Luckin reported a net loss of RMB551.8 million, an item in the company’s financial statements that has widened considerably over the last year.

READ MORE: Starbucks Offers Free Coffee, China Turns Up With Huge ‘Cups’... Again

[Cover image via @震长/Weibo]

more news

5 Best-Selling Eco-Friendly Reusable Coffee Mugs

Say goodbye to disposable beverage containers for good with these eco-friendly cups.

Chinese Barista Wins World Coffee Competition

Du Jianing, a Nanjing-based barista, recently put China on the mocha map after winning the 2019 World Brewers Cup.

Starbucks Offers Free Coffee, China Turns Up With Huge ‘Cups’... Again

Yesterday, Starbucks offered patrons in China quite the deal in celebration of Earth Day.

8 Items Every Coffee Lover Needs

Start your day off right with these flavorsome coffee products.

4 Excellent Eco-Friendly Reusable Coffee Mugs

Say goodbye to disposable beverage containers for good with these eco-friendly cups.

China's First Tim Hortons Opens to Massive 2-Hour Line

China's first Tim Hortons opened in Shanghai today, and people are lining up for hours to get their fill of bagel BELTS, Timbits and coffee.

Starbucks Debuts Buy-1-Get-1-Free 'Happy Hour' in China

Because, sometimes, one double chocolate chip Frappuccino just isn’t enough.

0 User Comments

In Case You Missed It…

We're on WeChat!

Scan our QR Code at right or follow us at thatsonline for events, guides, giveaways and much more!

7 Days in China With thatsmags.com

Weekly updates to your email inbox every Wednesday


Download previous issues

Never miss an issue of That's Magazines!

Visit the archives

Get the App. Your essential China city companion.