Luckin Coffee (Luckin Coffee) is headquartered in Xiamen and is the largest chain coffee brand in China.

Luckin Coffee takes “allowing every customer to easily enjoy a cup of good, affordable coffee” as its brand vision and “creates a world-class coffee brand originating from China” as its brand mission. By making full use of the new retail model of mobile Internet and big data technology, and in-depth cooperation with top suppliers in various fields, we are committed to providing customers with high-quality, cost-effective and convenient products.

Luckin Coffee’s coffee beans have won gold medals in the IIAC International Coffee Tasting Competition for two consecutive years.

On April 2, 2020, Ruixing Coffee plunged 85% before the market opened due to false transaction volume of 2.2 billion.

On April 3, the China Securities Regulatory Commission paid close attention to the financial fraud incident of Luckin Coffee and expressed strong condemnation of the company’s financial fraud. On April 5, Luckin Coffee issued an apology statement. On April 27, the China Securities Regulatory Commission’s investigation team entered Luckin Coffee.

On May 19, Luckin Coffee was asked to delist from Nasdaq and applied for a hearing. On June 29, Luckin Coffee officially suspended trading and filed for delisting. In the early morning of July 14, Luckin Coffee announced the results of the board of directors reorganization: In addition to the resolution passed by the shareholders’ meeting on July 5, Guo Jinyi succeeded Lu Zhengyao as the new chairman.

In September, the State Administration for Market Regulation issued administrative penalties against Luckin Coffee (China) Co., Ltd., Luckin Coffee (Beijing) Co., Ltd. and other companies for unfair competition. On October 12, five companies including Luckin Coffee (China) Co., Ltd. were fined 2 million yuan.

On the evening of March 16, 2021, Ruixing announced on its official website that the company had signed a restructuring support agreement with most holders of US$460 million in convertible senior bonds due in 2025. Debt obligations under the agreement will be fulfilled in the near future. Ruixing expects that the restructuring will provide existing note holders with note compensation of approximately 91-96 face value.

Business Model

Ruixing Coffee only started trial operation in January 2018. Relying on large subsidies and convenient APP delivery business model, coupled with viral media marketing, it has Overnight, Luckin Coffee became the most famous coffee brand in China.

Luckin’s methods of attracting customers are low prices and the use of technology. Luckin attaches great importance to price competition, offering discounts and promotions on WeChat, and the overall price is cheaper than Starbucks.

When Luckin became a company, it made great use of technology. Its stores did not accept cash. Luckin did not open physical stores. It relied on the sales method of mobile APP to reduce the cost of physical stores and switched to delivery method to deliver coffee. In the hands of consumers, customers can only pay through the Luckin application (App).

Luckin Coffee initially adopted the promotion activity of “new customers get a free first cup and a 50% off coupon”, and launched discounts or buy-one-get-one-free promotions from time to time. This is almost half buy and half giveaway, in order to attract a large number of consumers in a short period of time. Many people enjoy free coffee with the mentality of early adopters, and then spread the word through word of mouth: "There is free coffee to drink."

Luckin is also actively investing its marketing budget, not only targeting white-collar workers in the office, but also showing no mercy to the public: consumers can see relevant reports about Luckin Coffee on many well-known online platforms, plus People spread the word about the free coffee—and in a short period of time, the delicious, cheap and fashionable Luckin Coffee trend swept China’s takeaway coffee market.

Ruixing Coffee stated that the repurchase rate exceeds 50. This is because of the marketing method of “new customers’ first cup is free and a 50% off coupon”: after new customers take the free coffee, the second time Then buy it at half price to increase the repurchase rate.