Luckin Coffee’s blitz strategy

The following is an adapted translation of this article written by Zhu Xiaopei and published by Sina Tech.

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How long does it take a startup to go from zero to IPO?

The answer to that question keeps being updated.

For China’s dating app Momo, it took 3 years and 4 months. Online store Pinduoduo beat that with 2 years and 10 months, and then a rival app, Qutoutiao, topped that with 2 years and 3 months.

China’s Luckin Coffee might be the next to break the record.

Luckin’s IPO prospectus, which says the company seeks a listing on the Nasdaq, clearly says it’s looking for financing of US$100 million. It’s also backed by underwriters like Credit Suisse and Morgan Stanley.

And it has only been a year and a half since the company’s founding.

Luckin Coffee opened its first shop in October 2017 in the lobby of a tech startup’s Beijing headquarters. It began expanding in January 2018, and has blown up in the past year.

Now valued at US$2.9 billion, the business has 2,370 locations nationwide. And it’s aiming higher: according to founder “Jenny” Qian Zhiya, the goal is to beat Starbucks in both number of locations and cups of coffee sold.

Venti momentum

Luckin Coffee is more than just an innovator.

Harvard Business School professor Clayton Christesen defines disruption as innovation that makes products more accessible and affordable. By that definition, Luckin’s strategy is clearly an attempt at disruption.

Sweet deal or bitter aftertaste?

Building the flywheel