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Luckin enters vending machine sector
Published on: 2020-01-13
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040Luckin Coffee which surpassed Starbucks as the country's largest coffee chain operator in term of store numbers by the end of last year, said on Wednesday that it was entering the coffee and snack vending machine market to further expand its network, but this does not necessarily generate a quick boost to profits.

The Xiamen-based coffee chain operator will offer two kinds of machines including "Luckin Coffee Express", a coffee vending machine, and "Luckin Pop", a vending machine for snacks and beverages, to reach more consumers, particularly in office buildings.

041Luckin Coffee said that it had 4,507 self-operated stores by the end of 2019 in China, making it the largest coffee chain in terms of stores. The company added 10 million new customers in the fourth quarter of last year and had 40 million customers as of Dec 31, 2019. Luckin attributed the growth in customers to hand-brewed tea drinks, snacks and new retail outlets.

Starbucks has more than 4,100 stores in China, with larger single store areas than Luckin's.

042Luckin said that its snack and beverage vending machine-Luckin Pop-offers lower prices than its competitors by working closely with global suppliers and receiving discounts through large volume procurement. The two types of vending machines are expected to cover various locations including office buildings, campuses, airports, bus terminals, gas stations, highway service stations and communities, complementing current Luckin's retail store network.

According to consultancy firm Mintel, China's brewing coffee market has witnessed rapid growth, and reached 64.7 billion yuan in 2018, up 7.5 percent from the level in 2017. The growth rate is expected to continue till 2023, with annual growth rates of 6 percent.

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