The story appears on

Page A10

May 20, 2019

GET this page in PDF

Free for subscribers

View shopping cart

Related News

Home » Business

Luckin Coffee surges 20% on US debut

Shares of Chinese coffee startup Luckin Coffee surged about 20 percent in its US stock market debut on Friday.

Listed on the Nasdaq Global Select Market, the Chinese coffee retailer commenced trading at US$25 per share after its initial public offering was priced at US$17 apiece.

During the initial trading sessions, Luckin shares once surged over 47 percent at their high. Later, the whirlwind upswings gradually narrowed down to over 20 percent until the closing bell.

Before the listing, the company upsized the IPO deal by increasing its American Depositary Shares, which brought it US$561 million before fees.

Together with concurrent private placement to Louis Dreyfus Company BV, Luckin has raised approximately US$571 million in aggregate after fees to fuel its growth.

Reinout Schakel, chief financial officer of the company, said that they decided to enlarge the IPO deal based on broad support across several wealth funds, long-only funds and hedge funds. As of March 31, Luckin, founded in 2017, has set up 2,370 stores in 28 cities in China within 18 months.

Luckin’s rapid expansion is achieved thanks to a technology-driven, differentiated retail model built upon apps.

“We’ve got very small stores. We can actually bring down the cost significantly compared to some of our competitors,” said Schakel.

“What that then allows us to do is really provide a high-quality product for a very affordable price at a very convenient location,” he said.

The company has placed its center of gravity on pick-up stores and with limited seating, the pick-up stores are located in areas with high demand for coffee, such as office buildings, commercial areas and university campuses.

“We’re slightly different from traditional retailers. We first look at what is the demand. And then we supplement that with our store footprint by finding the right locations by using data,” said Schakel.

Schakel said the company has been “very focused on” bringing down the cost of perks and would continue to capture the huge demand in the Chinese market by expanding its business going forward.


Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend