Luckin Coffee Opens API for Air China, What is Starbucks' Next Move?
COVID-19 and China
A Luckin Coffee shop. PHOTO: Credit to Luckin Coffee.

Feb 18, 2019/EqualOcean/- Luckin Coffee announced that Air China has joined its API(Application Programming Interface), marking its first partnership of API platform in the Airline industry. Users can exchange their flyer miles into coupons for Luckin Coffee.

The company released its API plan in December 2018. LI Jun(李军), VP of Luckin, claimed that the company aims to increase customer stickiness and platform Daily Active Users (DAU), enable customers to change digital rights into real consumption on third-parties platform. It also helps to touch more customers for Luckin. LI indicated that coffee coupons are suitable for scenarios including credit exchanging, member priority, employee benefits and business gifts. Luckin is selling coffee in much more scenarios, from enterprises to customers, and now flight mileage.

YANG Fei (杨飞), the CMO (Chief Marketing Office) of the company claimed that there are three times of coffee consuming

Shanghai Pudong Development Bank-Luckin Coffee card provides customers the right to enjoy up to 150 cups of coffee for free. This kind of cooperation will bring Luckin into more types of consuming scenarios and Luckin shall be the super entry and protocol of traffic pool. Luckin consistently claims that the company hasn’t set a timetable for profit, and looks quite confident facing a loss of CNY 857 million (USD 128.55 million) for the first three-quarters last year(see more in this article).

We’ve reported that the company planned to go public in Hong Kong before, but it looks like the company has changed the target. Luckin was said to begin preparations for a U.S. initial public offering that could raise around $300 million, reported by Bloomberg. The deal is backed by Credit Suisse Group AG and Luckin could add more investment bank on the list.

Luckin would open stores in 18 more cities by the end of April. By far, Luckin Coffee has opened stores in 22 cities, which are mainly the capital cities, and at the end of 2019, Luckin’s business map will stretch to 40 cities in total. Starbucks, the coffee chain giant is under threatened by the overwhelming store expansion of Luckin. Starbucks CEO Kevin Johnson said "it's unlikely, " when asked if Luckin might overtake Starbucks in China by the end of 2019.

Feb 15, Starbucks opened its first Starbucks Reserve Bakery Cafe in Shanghai, China. The new store aims to create a new exciting all-day cafe dining and Italian aperitivo experience, marking the company’s ambition in China. In 2017, the company has opend the world largest Starbucks Reserve Roastery in Shanghai. "Our U.S. Starbucks stories, on average, do about USD 32,000 a week," Howard Schultz, Starbucks' chairman, said during an earnings conference call Thursday, reported by CNBC. "The Roastery in Shanghai, after eight weeks of operations is doing, on average, twice that not each week, but each day."

Will traffic pool and food be the next growth point for the two coffee chains?

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