Luckin Coffee is really keen on chasing up Starbucks. Just like how Starbucks sells out its own exclusive tumbler, Luckin is also launching its own Luckin cups.
The Chinese coffee chain has just joined a partnership with Haers. It is a thermos and water bottle maker company based in Zhejiang, the only one of its kind that’s on IPO.
Both companies agreed to have a three-year-partnership. In which Haers will produce Luckin cups and Luckin to sell it on its own platforms. Including its online platform and off line stores, as well as online stores on Tmall and JD.com.
The first line of the products shows Luckin brand on its coffee mugs, added with the face of China’s famous celebrities. Such as Liu Haoran and Zhang Zhen. Liu’s line seems on getting a lot of popularity among teenage girls.
Selling out original merchandise including tumbler, cups and straws has been a common practice for coffee chain. Behind the so called ‘no-waste campaigns’, cups and tumbler have brought extra revenue for coffee chains such as Starbucks and Stumptown Coffee.
Not only Luckin Cups, Luckin now has Luckin Tea as well
Meanwhile, Luckin is also announcing a big news for its tea stores.
Two months ago, Luckin launched its first non-coffee products under the brand of Xiaolu Tea. It is a realistic strategy to bring more revenue, as it operates in Chinese market which consumes more tea than coffee.
Research said that Chinese consumer drinks 317 cups of non-coffee drinks, while American consumer only drink 208 of those. While it recorded that the Chinese consumers only drink less than 7 cups of coffee per year on average.
The big news is that Xiaolu Tea would be a separated entities of Luckin Coffee. It will operate under the name of Luckin Tea company, independent and separated from the coffee stores. It will have its own stores, products and even merchandise.
Though Luckin has recorded 3,000 stores across China and went public on Nasdaq, it is still far from profitable. It even recorded a 100% raise of net losses in the second quarter of 2019 from the same period 2018. With RMB 870 million in total net revenue, the RMB 681.3 net losses means a lot.
This is due to sales and marketing expenses. The company records RMB 390.1 million spent on the sales and marketing, a 119.1% year-on-year increase.