After overtaking Starbucks in China, Luckin Coffee continues aggressive streak with vending machines, JV roasting plant
The chain says the new channels are part of its “omnichannel customer traffic network”.
After surpassing Starbucks in terms of stores, Luckin Coffee is seeking to further densify its network in China by pursuing unstaffed retail machines and strengthening its supply chain.
The NASDAQ-listed company announced the launch of its smart unmanned coffee machine "Luckin Coffee Express" and smart vending machine "Luckin Coffee Pop MINI" at its strategy conference held in Beijing.
The unmanned terminal devices will be installed in various locations including office buildings, campuses, airports, bus terminals, petrol stations and highway service stations.
Luckin Coffee chief executive Jenny Qian said the company's unmanned retail network, store footprint and e-commerce channels have formed its omnichannel customer traffic network.
At end-2019, the Chinese coffee chain had 4,507 self-operated stores, surpassing Starbucks’ 4,300 shops in the world’s second largest economy.
Luckin previously announced its US$400m convertible senior notes offering and has entered into a joint venture global firm Louis Dreyfus Company (LDC) to operate a roasting plant.
The company said it plans to use the proceeds from the notes offering for further store expansion and the said unmanned retail initiative, amongst other purposes.
The senior, unsecured notes are also convertible into American Depositary Shares, each currently representing eight Class A ordinary shares of the Company. Initial buyers are also given an option to purchase up to an additional US$60m.
Meanwhile, the upcoming 35,000 sqm. roasting plant in Xiamen, projected to start by mid-2021, is said to use environmentally-friendly technology for coffee cleaning and roasting.
According to LDC, the plant would have an annual production capacity of 30,000 tonnes, which might be expanded to 40,000 tonnes in the second phase of the construction.
“Through this coffee roasting joint venture, Luckin extends upstream closer to the raw materials and production, giving greater product quality control and enhancing the ability to offer better products and services to consumers, together with a better coffee experience,” Luckin Coffee senior vice-president Jinyi Guo said in a statement.
Luckin Coffee reported a revenue growth of 557.6% to US$208.9m year-on-year in Q3 2019.
