FILE PHOTO: A cup of ‘Luckin Coffee,’ coffee is displayed during the company’s IPO at the Nasdaq Market site in New York, U.S., May 17, 2019. REUTERS/Brendan McDermid
BEIJING/SHANGHAI (Reuters) – Luckin Coffee Inc (LK.O) said it is expanding into vending machines that sell freshly brewed hot beverages and snacks, seeking even more of the China market after overtaking Starbucks Corp (SBUX.O) as the country’s biggest coffee chain by number of stores.
Luckin founder and CEO Qian Zhiya said the new strategy allowed it to be asset-light and nimble.
“It allows us to get closer to consumers and we are not restricted by the license approvals,” she said at an event to launch the new business.
Growing at breakneck speed by offering cheap delivery, online ordering and big discounts, Luckin also said it now has just over 4,500 stores across China – achieving a goal it set one year ago and topping Starbucks which has 4,100.
Luckin showcased two vending machines at the event – one featuring a Swiss Schaerer coffee machine that can make a variety of hot and iced drinks, as well as one offering a range of snacks.
Investors in the Nasdaq-listed startup, worth $8.4 billion, include Singapore sovereign wealth fund GIC and China International Capital Corp Ltd. By comparison, Starbucks has a market value of $104 billion.
Luckin made a net loss attributable to shareholders of about 532 million yuan ($76 million) in the third quarter ended Sept. 30, compared with a 484.9 million yuan loss in the same period a year earlier. It has also said it is looking to expand overseas.
Reporting by Pei Li in Beijing and Brenda Goh in Shanghai; Editing by Edwina Gibbs