In a statement, Luckin Coffee Inc founder and CEO Qian Zhiya stated, it is in the process of expanding its business into vending machines that sell freshly brewed hot beverages and snacks, as it seeks to corner even more of the Chinese market after overthrowing Starbucks Corp as China’s biggest coffee chain by the number of stores.
This new strategy will enable Luckin to asset-light and nimble, said Qian Zhiya while adding, “It allows us to get closer to consumers and we are not restricted by the license approvals”.
Luckin is growing at a neck breaking speed by offering online orders, cheap deliveries and hefty discounts. The Chinese company has just over 4,500 stores across China. In comparison Starbucks has 4,100 stores.
Luckin showcased two of its vending machines, with one featuring a Swiss Schaerer coffee machine that can make a variety of hot and iced drinks, while offering a range of snacks.
Luckin’s investors include Singapore’s sovereign wealth fund GIC as well as China International Capital Corp Ltd.
While Luckin’s market valuation is at 8.4 billion, Starbucks is at $104 billion.
In the third quarter ended September 30, 2019, Luckin made a net loss attributable to shareholders of around $76 million (532 million yuan); during the previous year it had posted a loss of 484.9 million yuan.