A rival of Starbucks in China has announced its plans to get listed in the US. The company is based in Beijing. On Monday, Luckin Coffee announced that it is planning to get listed on Nasdaq, as per their expansion plan.
It has been opened just 18 months back. Luckin has come up with 2300 outlets all over China and is planning to open more 2500 outlets by this year. If this happens then the company would oust Starbucks as it would be the largest chain of coffee outlets in China.
Luckin is yet to reveal the amount it is planning to raise or when it would go for the initial public offering. The company raised considerably higher amount of fund from BKCC. After its recent fundraising that happened in April, the company was valued at $2.9 bn.
The climb of Luckin recently is an example of the Chinese companies rivaling brands in the consumer market of the western world. Luckin had said on Monday that the company boosted after the growth in consumption of coffee in world’s second biggest economy to more than 8 billion cups the previous year.
Both Luckin and Starbucks serve coffee, but that is the only common thing between them. The outlets of Luckin are small and in spots that accept orders online for pickup and delivery, unlike the coffee shops of Starbucks.
Luckin had focused on technology from the beginning. Its outlets are not accepting cash and customers pay only through Luckin app. This app gives customers loyalty bonuses. China is one of the biggest markets in US for Starbucks. With 3000 stores all over the country, Starbucks has more outlets than Luckin. By 2022, Starbucks is planning to double its number. Luckin would face challenges in the long term. Its filing with SEC of US has said that it has lost $240 million in the previous year. Luckin said that there are chances that the company would lose more money for building better future.