Chinese coffee startup Luckin is planning on a new project focused on self-service coffee machines, which is expected to be a central part of the company’s expansion strategy, Chinese media reported.
Branded as Luckin Coffee Express, the self-service machine is designed for public spaces like schools and office buildings. Users can locate the nearest coffee machine and place an order through the Luckin app. Drinks are ready 30 seconds after scanning the pick-up code.
The company will launch a pilot program to test the project soon, according to media reports.
Luckin declined to comment on the news when contacted by TechNode.
The Chinese brand of Luckin Coffee Express, “瑞即购,” was trademarked by a Beijing subsidiary of the coffee upstart in May, according to Trademark Office of China’s National Intellectual Property Administration.
Luckin’s aggressive expansion has positioned the coffee startup as a challenger to Starbucks in China. The company said in January that it plans to have 4,500 stores in China by the end of the year, up from around 2,370 as of March. That’s on par with Starbucks, which has around 3,800 in China and plans to add 600 more by the end of September.
Luckin recorded $79 million in losses in the first quarter of the year, according to its prospectus, and raised around $571.2 million in its May IPO. It is focusing on an asset-light strategy for its expansion, including pick-up stores with limited seating and typically located in areas with a high demand for coffee, such as office buildings. Such stores, usually have lower rent and fit-out costs, account for 91.3% of the company’s total stores. Shifting to the self-service coffee machine market is a move further down along the asset-light track.
Luckin’s move into the self-service segment of the coffee industry poses challenges to existing players including Wing Cafe, Xiaoka Coffee, and Yee Coffee.