In episode 32 of TechBuzz China, co-hosts Ying-Ying Lu and Rui Ma talk about Luckin Coffee, the hybrid online-offline coffee chain unicorn startup that’s turning heads in China with its rapid expansion and innovative business model. In fact, immediately after we completed recording this episode, news broke that the year-old company has raised another $200 million in fresh funding, upping its valuation to $2.2 billion. Throughout Luckin’s existence, Western media has had a habit of comparing Luckin to Starbucks, and describing Luckin as the “Starbucks challenger.” But just how accurate is this juxtaposition? Additionally, how has now-celebrity CEO Qian Zhiya, or Jenny, been able to attract tremendous amounts of venture capital and instill strong investor confidence as a first-time founder?
Rui and Ying-Ying begin today’s story with Jenny’s background. Now 43 years old, she was previously best known as one of the hidden weapons of China’s leading transportation companies, the operations-heavy Ucar, where she rose from an administrative role to become COO and EVP of the rental division in 2014. At Ucar, Jenny oversaw the rapid growth in mobile-enabled on-demand services for the ride-sharing business — valuable expertise for envisioning and executing Luckin’s marriage of offline storefront expansion and on-demand experience on the smartphone. The companies’ ties do not end there: Jenny started Luckin with a loan from Ucar CEO Lu Zhengyao, and many of Luckin’s investors had also invested in Ucar.
Rui and Ying-Ying continue by comparing Luckin with Starbucks, and then explaining why that comparison doesn’t make much sense. Complete with vivid stories and analysis, our co-hosts’ thesis is that Luckin’s rise is a prime example of how brands are increasingly using offline presence to acquire online customers, and that the company’s technology and digital-first F&B business model innovations can be exported and applied to other businesses and in other locales.
Listen to find out: Which startups, both in China and here in the U.S., can we more accurately consider to be the chain’s “cousins”? What role does data play in optimizing aspects such as delivery, inventory management, personalized deals, and expansion? It’s too early to tell if Luckin will succeed, but what factors may tip the odds in one direction or another? How is this Chinese company using technology to successfully reimagine F&B — faster than Starbucks ever has — beginning with one of the oldest and seemingly simplest markets, grabbing a cup of coffee?
As always, you can find these stories and more at pandaily.com. Let us know what you think of the show by leaving us an iTunes review, liking our Facebook page, and tweeting at us at @techbuzzchina to win some swag! Finally, we would like to give a shoutout to our new listeners over at our partner, dealstreetasia.com.
SupChina’s profile on Luckin CEO Jenny: https://thechinaproject.com/2018/07/11/a-billion-dollar-coffee-company-and-the-woman-behind-it/
Ed Sander’s piece on Luckin: http://www.chinatalk.nl/luckin-de-chinese-startup-die-concurrent-starbucks-leerde-bezorgen/
