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A Luckin Coffee shop in Beijing on Sept. 28, 2019. (Image credit: TechNode/Coco Gao)

Luckin fined, rolls out a new strategy

  • Chinese authorities imposed a RMB 61 million ($9 million) fine on Luckin and a group of affiliated companies for creating unfair competition by engaging in sales fraud. This is the first fine the Chinese coffee chain operator has received after admitting to financial fraud in early April. (TechNode)
  • Luckin, still reeling from the scandal, adjusted its growth strategy to focus on shoring up the repurchase rate for existing users rather than attracting new users. To cut costs, it is using privately managed groups on Tencent’s enterprise communication app Wechat Work to push coupons, encouraging repeat business. Users scan QR codes displayed in its offline stores or WeChat official account posts. Luckin has reportedly amassed over 180,000 private traffic users, and the figure is growing at around 60,000 per month. (Iresearch, in Chinese)

VCs investing into China’s new brands

New Chinese brands are capitalizing on growing consumer interest in domestic brands and products, especially those featuring traditional Chinese styles and cultural elements. E-commerce giants like Alibaba and short video apps like Kuaishou are beefing up support for such brands with more online traffic as well as updated supply chains.

  • Perfect Diary, China’s hit e-commerce-based cosmetic brand, reportedly received $140 million investment at a valuation of $4 billion, double the $2 billion market cap it was rumored as having earlier this year. Private equity firms Warburg Pincus and The Carlyle Group invested $70 million each in the round as the company prepares a US listing reportedly slated before year-end. Zhang Donghao, chief financial officer of e-commerce site, will reportedly join the three-year-old company to oversee stock market debut protocols. (All Weather TMT, in Chinese)
  • Jiangxiaobai, a Chinese liquor brand, announced Sept. 24 the completion of a Series C for an undisclosed amount led by China Renaissance’s Huaxing Growth Capital. Baillie Gifford, Loyal Valley Capital, CMB International, Kunyan Investment Management, and Wens Investment joined the round. (Xinhua, in Chinese)
  • Miniso, a Tencent-backed household product brand, filed its prospectus with the US Securities and Exchange Commission on Sept. 24 for a New York listing. In the same week, the company facing scrutiny over product safety concerns. The Shanghai medical product regulator found that chloroform levels in a nail care product sold by the company was 1,400 times higher than the standard allowed by the state.  (Sina Tech, in Chinese)

Grocery delivery battle, now even hotter

  • Users of Alibaba’s food delivery platform Eleme will soon be able to order from Tmall Supermarket, Alibaba’s online grocery marketplace. Orders will deliver to users within an hour for some locations or a half-day for others, rather than the previous 1 to 2 day delivery window for orders placed via the Taobao or Tmall apps. The move follows shortly after Alibaba made products from Freshippo available on the platform, as the e-commerce giant further integrates its local lifestyle services. (Krasia)
  • Chinese ride-hailing giant Didi rolled out last Friday an independent app for its grocery delivery platform Chengxin Youxuan, a program it began piloting in June. The company said the service had more than 550,000 orders per day in three cities within China’s southwestern Sichuan province. The pilot will expand to more provinces in September. Entering the market means the company will be competing with grocery delivery giants ranging from Meituan to Alibaba. (Tech Globe, in Chinese)

Emma Lee (Li Xin) was TechNode's e-commerce and new retail reporter until June 2022, when she moved to Sixth Tone to cover technology and consumption. Get in touch with her via or Twitter.