A billion-dollar coffee company and the woman behind it
The hard-charging style of Chinese tech entrepreneurs has arrived in the coffee shop sector: Luckin Coffee (瑞幸咖啡 ruì xìng kāfēi), a chain of cashless, app-powered stores, has raised $200 million, according to Reuters.
The founder of Luckin is the wonderfully named Qian Zhiya 钱治亚 — her surname qián literally means “money” and zhìyà means “rule Asia.” She spent most of the last decade as COO of Shenzhou, a car rental app and website. She is also co-founder of UCAR, a ride-hailing service spun off from Shenzhou.
In November 2017, she launched Luckin. By the end of May, Luckin had already opened 525 stores in 13 cities across China.
“Unicorn” is the tech industry buzzword for an unlisted startup valued at $1 billion. The Financial Times says (paywall) Luckin has joined the club — this funding round “values the chain at $1 billion as it builds a war chest to try to challenge Starbucks’ dominant position.”CEO Qian sees the coffee shops like a tech business. She said that the new investment would be used for “product R&D, technology innovation, and business development,” according to Chinese-language media reports.Starbucks has 3,300 stores in China, so Luckin has a way to go to catch up, but the FT says Luckin “has already overtaken Britain’s Costa Coffee, which has just 420 stores in China after a decade in the country.” According to the same article, Starbucks “has 80 percent of the country’s coffee chain market, up from 60 percent in 2012, and is opening new outlets at a rate of 500 a year.”In May this year, Luckin threatened to sue Starbucks for “engaging in monopolistic practices by signing exclusive rental contracts and pressuring suppliers.” Starbucks dismissed the accusation, calling it “promotion hype,” according to the China Daily. Luckin has apparently got the publicity it desired and there has been no further news of a lawsuit.Luckin is aggressively targeting young office workers with its locations, delivery services, and low prices: Quartz says a large Americano from Luckin in Beijjng “costs 21 yuan ($3.15)…roughly 20-30 percent lower than comparable items from Starbucks in China.”Luckin stores are cashless: You need the Luckin app to order in a store or via delivery, and you can pay using WeChat or Luckin’s own “coffee wallet.” Quartz says Luckin’s delivery services are key, explaining that “of its 525 outlets, 231 are kitchens dedicated exclusively to filling orders placed in offices, homes, or elsewhere.”The marketing is slick: Take a look at the video on Luckin’s home pagefeaturing popular actors Chang Chen张震 and Tang Wei 汤唯.Coffee consumption is growing 15 percent annually in China. TechNode reports that Coffee Box 连咖啡, a coffee delivery platform, previously “raised 158 million yuan in series B+ funding.”“Our goal is to defeat Starbucks in China,” said Qian, according to Xinhua News Agency (in Chinese).
ABOUT QIAN ZHIYA
More than 40,000 employees at Shenzhou were under Qian. The Xinhua article linked above calls her “the right hand” of Shenzhou’s CEO, Lu Zhengyao 陆正耀. Lu provided most of the initial investment for Luckin.“The face of a Buddha, but she workslike thunder” (菩萨面庞,雷霆手段 púsà miànpáng, léitíng shǒuduàn) in “an industry thick with the scent of male hormones” (浓郁雄性荷尔蒙的行业 nóngyù xióngxìng hè'ěrméng de hángyè) is how one former colleague described her work style at Shenzhou, according to one article circulating on the internet (in Chinese).“Frequent overtime work made Qian Zhiya become a heavy lover of coffee,” says a different article (in Chinese).There is not much information about Qian in the public domain. She graduated from Wuhan Textile University in 1999, and has an executive M.B.A. from Peking University.