Luckin Coffee exits soft launch, trying to poach top Starbucks staff

Luckin Coffee (瑞幸咖啡), a new coffee brand the “new retail professional coffeeshop operator”, has announced that it now opened in 13 cities, 400 stores, served 1.3 million customers with 5 million cups of coffee after 4 months of soft launch, TMT Post is reporting.

The CEO of Luckin Coffee, Qian Zhiya (钱治亚), is the former COO of UCAR (神州优车). The new coffee company has attracted RMB 1 billion ($156 million) in funding to spend on subsidies to attract new customers to compete against Starbucks.

“Why is there only 4 to 5 cups of coffee per capita consumption in mainland China compared to 750 in Europe, 400 in the United States, and 200 per capita coffee consumption in Japan and South Korea?” Qian said at the announcement. She attributed it to the two major pain points: high prices and inconvenience of purchasing a cup of coffee.

Hear more: China Tech Talk 46: Internet business models disrupt China’s coffee market: Luckin Coffee

From last December, Luckin Coffee has been poaching staffs from Starbucks, by attracting them with three times higher salary in the same position, according to Beijing Business Today. Luckin Coffee posted hundreds of job ad for part-time workers and baristas, followed by various types of technical personnel and functional operations personnel. The salary of some senior executives has reached RMB 15,000-22,000 ($2,352 ~ 3,450) per month; in terms of recruitment regions, the top recruiters are mostly first-tier cities such as Beijing, Shanghai, Tianjin, and Guangzhou. Apart from its physical stores, the coffee company delivers coffee to customers with the help of Didi, Meituan, and Shunfeng.

Luckin Coffee physical store page, and delivery service page (Image Credit: TechNode)

Starbucks is still the top player in China enjoying the ever growing coffee market. There are now more than 3,200 stores across 139 cities employing 40,000 people and serving more than 6 million customers every week. In order localize its digital strategy, the coffee giant has opened Starbucks Roastery last year with a matching AR game and introduced WeChat gift card mini program and new website solely for the Chinese market.