Luckin Coffee

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Luckin Coffee Inc.
legal form Corporation
ISIN US54951L1098
founding October 2017
Beijing, China
Seat Xiamen , Fujian, China
management Jenny Qian Zhiya and Charles Zhengyao Lu
Branch coffee
Website www.luckincoffee.com

Luckin Coffee Inc. ( Chinese  瑞 幸 咖啡 , Pinyin Ruìxìng Kāfēi ) is a Chinese coffee company and coffee house chain. It was established in Beijing in 2017. As of January 2020, it operated 4,507 stores, exceeding the number of Starbucks stores in China. Most stores are small pickup locations in office buildings or on college campuses that are used to pick up and deliver online orders.

history

Luckin Coffee was founded in October 2017 and had opened its first stores in Beijing and Shanghai by January 2018. The company announced the completion of a $ 200 million Series A financing in July 2018.

The company continued its rapid growth - by October 2018, Luckin Coffee had opened 1,300 stores, surpassing the number of Costa Coffee stores to become the second largest coffee brand in China. Luckin Coffee also signed a strategic cooperation agreement with Tencent . Much of Luckin Coffee's expansion was driven by an aggressive marketing strategy in which the company spent three times as much to fuel its growth. In May 2018, Luckin Coffee accused Starbucks of creating a monopoly by signing exclusive contracts with suppliers and owners. Starbucks dismissed these allegations as marketing machinations. On May 16, 2018, the case was officially filed in the Shenzhen Intermediate People's Court. In October 2019, Luckin Coffee unilaterally withdrew the case.

In January 2019, Luckin Coffee announced that it was opening 2,500 new stores and aiming to surpass Starbucks to become the largest coffee brand in China. Luckin also gained access to the US stock markets, where the stock initially traded at $ 17 each on the Nasdaq as part of a sponsored ADR program . After hitting $ 25.96 on the first day, the stock fell to $ 16 on the second day of Nasdaq trading. By the end of September 2019, Luckin Coffee had opened 3,680 stores and posted a net loss of $ 75 million in the third quarter of 2019.

On January 8, 2020, Luckin Coffee held a press conference on the operation of their self-service stores. At the conference, Luckin announced to the public that they had opened 4,507 stores in the past two years and, as such, had already become the largest coffee chain brand in China, outperforming Starbucks. At the press conference, Luckin Coffee also announced its staffless retail strategy and two new tech products - Luckin Coffee EXPRESS and Luckin pop MINI . The EXPRESS sales outlets of Luckin Coffee use the coffee machines manufactured by Schaerer in Switzerland and will in future be used as self-service coffee machines in offices, campuses, airports, train stations and communities. Luckin popMINI is the vending machine at the e-commerce price.

On January 31, 2020, short seller Muddy Waters Research posted an anonymous 89-page report on Twitter claiming that Luckin Coffee had falsified financial and operational figures. According to the report, the number of items sold per store increased by at least 69% in the third quarter and 88% in the fourth quarter of 2019, allegedly due to 11,200 hours of video footage. Prior to the U.S. stock market opening on February 3, 2020, Luckin Coffee categorically denied all of the claims made in the report. The company argued that the report made malicious and false allegations with unsubstantiated evidence and flawed methodology.

On April 2, 2020, Luckin Coffee announced that an internal investigation revealed that its chief operating officer, Jian Liu, was faking 2019 sales of approximately RMB 2.2 billion ($ 310 million) would have. The next day, the China Securities Regulatory Commission said it would investigate the company for fraud, causing the share price to plummet 80%. On April 8, the share was suspended from trading on the US stock market and European trading venues. In mid-April 2020, American investment bank Goldman Sachs announced it would take over and sell the Luckin stock held by Lu Zhengyao, the company's chairman, after defaulting on a corporate contract for difference . The share has been trading again since May 20, 2020.

Business activities

A mug from Luckin Coffee

The Luckin Coffee Stores started test operations in January 2018. The company operates shops, stores, and kiosks that sell coffee, tea, and groceries. As can be seen from sources, the company's marketing and market attractiveness are centered around marketing and discounts. Luckin has promotions that offer every new customer a free drink and a 50% discount coupon for a cup. They also offer "Buy One, Get One Free" coupon for loyal customers. These discounts make the price lower than Starbucks and attracted a greater number of returning customers in the early stages of its business.

The brand also has a strong focus on technology. Luckin Coffee didn't open traditional brick and mortar stores in the beginning. The physical locations were only used to prepare coffee and fulfill online orders collected by customers or deliverers. Although most stores do not have seats or offer other services to customers and are in less prestigious locations compared to Starbucks, the brand has been able to attract a new generation of customers in China. Luckin Coffee's target customers are local employees and students who don't have much time to drink coffee in stores.

Customers need to download the Luckin Coffee app to order and pay for drinks online. Luckin Coffee also works with China's second largest courier, SF Express, and delivers orders to customers within two kilometers of any store. This working principle suits the fast-paced life of the Chinese and puts pressure on other traditional coffee brands.

Products

Purchases can only be made through the Luckin mobile app. Luckin offers coffee-based beverages that are also available in other coffee shops, and offers a selection of recipes specifically tailored to the tastes of Chinese consumers. Luckin Coffee commissioned Hidenori Izaki ( 2014 World Barista Champion ) to advise the company on recipes and store design.

Web links

Individual evidence

  1. ↑ 瑞 幸 咖啡 进军 无人 零售 ， 直营 门店 4507 家 超 星巴克 . January 8, 2020.
  2. ↑ a b c China's Luckin Coffee takes on Starbucks . CNBC. Retrieved December 28, 2018.
  3. ↑ This coffee company thinks it can beat Starbucks in China . CNN. Retrieved December 28, 2018.
  4. ↑ 完成 2 亿 美元 A 轮 融资 瑞 幸 咖啡 做好 了 长期 亏损 准备？手机 金融界 ， 11 July 2018
  5. ↑ 咖啡 巨头 现 诸神 之 战 中国 市场 成 关键 . September 7, 2018.
  6. ↑ 瑞 幸 咖啡 与 腾讯 签署 战略 合作 中国 咖啡 市场 及 发展 前景 分析凤凰网 ， 7 September 2018
  7. ↑ 中国 咖啡 市场 白热化 瑞 幸 咖啡 与 腾讯 达成 战略 合作搜狐 网 ， 6 September 2018
  8. ↑ Mary Hui: What you can eat and drink at Starbucks's China rival . May 14, 2019. Retrieved July 3, 2019.
  9. ↑ 历经 16 个 月 瑞 幸 起诉 星巴克 案 已由 瑞 幸 单方面 撤诉 . November 14, 2019.
  10. ↑ 瑞 幸 咖啡 今年 计划 新 开 2,500 家 门店 取代 星巴克 在 中国 龙头 地位 . 2nd January 2019.
  11. ^ Maggie Fitzgerald: Wall Street sees major growth potential for Luckin in untapped Chinese coffee market . CNBC. June 16, 2019. Retrieved June 17, 2019.
  12. ↑ 中国 星巴克 劲敌 - 瑞 幸 咖啡 申请 美国 上市 . April 23, 2019.
  13. ↑ Amelia Lucas, Leslie picker: Starbucks' China challenger Luckin Coffee prices IPO at $ 17 a share . CNBC. May 16, 2019. Retrieved June 17, 2019.
  14. ↑ Janet Freund: Luckin Coffee Burns Investors With 39% Plunge . Bloomberg LP. May 23, 2019. Retrieved July 3, 2019.
  15. ^ Paul R. La Monica: Luckin Coffee surges in Wall Street debut . CNN. May 17, 2019. Retrieved July 3, 2019.
  16. ↑ 瑞 幸 咖啡 "顺道 赚钱" . 22nd November 2019.
  17. ↑ a b Breakingviews - China fortune hard to read in Luckin Coffee beans . February 5, 2020. Accessed March 3, 2020. 
  18. ↑ Luckin Coffee Announces smart unmanned retail strategy, bringing Luckin closer to customers . January 8, 2020.
  19. ↑ Luckin Coffee Responds to Anonymous Report Containing Misleading and False Allegations . 3rd February 2020.
  20. ↑ Amelia Lucas: Shares of China's Luckin Coffee plummet 80% after investigation finds COO fabricated sales . CNBC. April 2, 2020.
  21. ↑ Luckin Coffee Announces Formation of Independent Special Committee and Provides Certain Information Related to Ongoing Internal Investigation . April 2, 2020. Accessed April 4, 2020.
  22. ↑ Julie Zhu, Zoey Zhang: China probes alleged fraud at Luckin Coffee, banks review IPO work . April 3, 2020.
  23. ↑ a b Connie Lin: Embattled Luckin Coffee sees wild surge as customers scramble to cash in on free drink vouchers ( en-US ) April 12, 2020. Retrieved April 12, 2020.
  24. ↑ Amelia Lucas: Luckin Coffee's stock has been halted for pending news since Tuesday ( en ) April 8, 2020. Retrieved on April 20, 2020.
  25. ↑ Luckin Coffee Inc. share (ADRs), WKN A2PJ6S, ISIN US54951L1098, current reports from the trade. Stuttgart Stock Exchange , accessed on April 28, 2020 .
  26. ↑ Luckin Coffee: € 224,034.94 loss? How to gamble properly. Retrieved June 8, 2020 .
  27. ↑ 中國 「瑞 幸 咖啡」 爆 紅 星巴克 惡夢？ . December 29, 2018.
  28. ↑ Mary Hui: What you can eat and drink at Starbucks's China rival . May 14, 2019. Retrieved July 3, 2019.
  29. ↑ 瑞 幸 打败 不了 星巴克 ， 但 未必 是 下 一个 ofo . January 15, 2019 Template: dead link /! ... nourl ( page no longer available )
  30. ↑ luckin coffee 运营 模式 新 零售 + 互联网 = 瑞 幸 咖啡 . May 27, 2018.
  31. ↑ a b c Mary Hui: What you can eat and drink at Starbucks's China rival . May 14, 2019. Retrieved July 3, 2019.