Startups are tackling work-from-home problems, Facebook is testing TikTok-style features in India, this e-tailer received US$58 million in funding.
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Luckin Coffee’s fortunes have changed in a flash. Here's a timeline of what happened.
Shares for Chinese coffee chain startup Luckin Coffee surged 13.1% Wednesday after reporting better-than-expected Q3 results.Why it matters: The results reassured investors concerned with the company’s subsidy-fueled expansion.The company’s net losses slowed during the period, reflecting an improved cost control strategy.Details: Luckin’s net loss per American Depositary Share (ADS) was RMB 2.24 ($0.32), beating consensus analyst estimates of $0.37, and compared with a loss of RMB 3.60 in same year-ago period.Luckin’s total net revenues were RMB 1.54 billion ($215.7 million), up 540.2% year on year from RMB 240.8 million in Q3 2018, topping analyst expectations of $211.88 million.Net revenue uptick was driven by growth in its core beverage business, for which the number of transacting customers, effective selling price, and number of products sold per transacting customer increased.
The global digital economy is moving into its next phase as we observe a growing number of Chinese tech companies targeting overseas markets, bringing along their capital, expertise, and technology.The tech development gap between Southeast Asia and China creates vast opportunities for investors to profit from investing in up-and-coming tech companies.Will the going abroad (chuhai) endeavor prove to be a success or a flop?There is an accelerating need for innovation across the food & agriculture value chain due to the changing consumer tastes and preferences in recent years.Consumers not only seek healthier and more affordable options, but they also demand expanded varieties and convenience.We have witnessed Luckin Coffee bursting onto China’s coffee scene in January 2018, filling the unmet gap with a more appealing price point and its efficient delivery service.
Suning Xiaodian, the convenience store unit of Chinese retailer Suning.com, is testing the leisure beverage business with the launch of its first in-store coffee shop as the company looks to double down on its coffee market bet.Why it matters: Coffee chains in China like Starbucks and Luckin face growing competition from the likes of Suning, which has an extensive offline presence.Convenience stores are increasingly offering coffee-based beverages are entry-level pricing.China’s coffee market size has grown to RMB 56.9 billion (around $8.01 billion) in 2018 from RMB 15.6 billion in 2013.It is expected to grow 26.0% annually to reach RMB 180.6 billion in 2023, according to Frost & Sullivan.In September, China’s state-owned gas and petrochemical conglomerate Sinopec rolled out a new coffee brand called EasyJet to approximately 50,000 convenience stores located in the company’s gas stations across the country.
Chinese drone maker Ehang has secretly filed an application for an initial public offering with Nasdaq, seeking to raise as much as $200 million, Bloomberg reported on Thursday, citing people familiar with the matter.Why it matters: The drone maker joins a number of Chinese startups seeking to raise funds on US stock markets, such as coffee chain Luckin Coffee, despite Beijing’s efforts to lure high-tech firms to list domestically.China has set up a Nasdaq-style tech board on the Shanghai Stock Exchange to boost investments to the country’s high-tech sectors, but the bourse gives its preference to companies in the semiconductor and traditional manufacturing industries.Details: Ehang plans to offer 10% to 15% of its shares in the IPO, with the company’s valuation not yet set due to volatile market conditions, according to the report.The company is still deliberating the matter and details of the offering including timeline and fundraising size could still change.Context: Founded in 2014, the Guangzhou-based company specializes in drones used for commercial uses such as agriculture.
Chinese coffee chain upstart Luckin Coffee has signed an agreement with Louis Dreyfus Company (LDC), a European food processing company, to sell Luckin Juice in China through a joint venture (JV).Why it matters: Known as China’s Starbucks challenger, Luckin is expanding aggressively across product categories and overseas markets.After adding snacks and fruit-based beverages, the Xiamen-based company announced plans this month to spin off its tea-based beverage line known as Xiaolu Tea, or “Fawn Tea” in English, as an independent operation.The company has been growing at a breathless pace and is still loss-making.Expansion to more product categories will add to financial pressures on the US-listed company.The deal appears to have been in discussions for months.
Coffee giant Starbucks is deepening its partnership with Alibaba with the launch of voice-activated delivery on smart speaker Tmall Genie as it fends off competition from Chinese coffee chain, Luckin.Why it matters: Closer alignment with Alibaba may help Starbucks in its competition with Luckin as the rivalry expands beyond coffee.Starbucks is not only leveraging Alibaba’s lifestyle services, but also the benefits of its broader ecosystem, from the AI assistant to the music streaming business.The feature connects membership accounts for Tmall Genie, food delivery platform Ele.me, e-commerce giant Taobao, and Starbucks.Luckin said in May that it was seeking a tie-up with Alibaba-owned Ele.me, Starbuck’s exclusive delivery partner.“The Starbucks feature through Alibaba’s Tmall Genie ushers in a new era of digital customer engagement for Starbucks, leveraging ground-breaking digital technology to create an unprecedented experience that elevates our connection with customers to new heights.”
Nasdaq-listed Luckin Coffee announced plans today to split off its tea-based beverage line known as Xiaolu Tea, or “Fawn Tea” in English, as an independent operation.Officially known as Luckin Tea, the new unit will boast its own branding and physical stores.Luckin will also launch a separate app as well as mini-program for online orders and delivery.Why it matters: The move coincides with the Xiamen-based beverage giant’s expansion into China’s lower-tier cities.Luckin has been looking for ways to steal a march amid intensifying competition with Starbucks.The firm is also looking to tea-based beverages to diversify revenue streams and find new growth.
Starbucks rival Luckin Coffee has rolled out a lineup of branded merchandise, including celebrity figurines and a limited edition cup with fawn antlers, on Monday.Why it’s important: This is the first time Luckin has sold such merchandise as it evolves its marketing and branding strategy.The company aims to duplicate the success of its US rival Starbucks whose drinkware and other accessories are popular in China.Starbuck’s cat paw cup caused in-store brawls earlier this year.The company’s latest industrial and commercial update has added clothing, clocks, glasses, and shoes to its business scope.Detail: The company also launched its store on both JD.com and Tmall.
Shares in Luckin Coffee tumbled in the US overnight after the Chinese coffee chain upstart reported widening losses in the second quarter despite beating revenue expectations.Why it’s important: Widely considered as a challenger to Starbucks’ crown in China, Luckin Coffee burst onto the scene in 2018 and soon became the country’s number two chain despite burning through cash to fuel its rapid expansion.The Xiamen-based firm raised $561 million in a US IPO in April this year.Details: Luckin Coffee shares closed 16.7% lower in US trading overnight after it reported that net losses doubled to RMB681.3 million ($99.2 million) in the quarter.Revenue rose sevenfold to RMB 909.1 million ($132.4 million) in Q2, beating Refinitv’s analyst estimate of $130.2 million.The firm’s per-share loss was 48 cents, missing Refinitiv’s estimate of 43 cents and Zacks Investment Research’s 44 cents.
This article by Eudora Wang originally appeared on China Money Network, the best data intelligence platform tracking China’s tech and venture capital markets (access requires subscription).Joy Capital, a venture capital firm that has backed Chinese Starbucks challenger Luckin Coffee, announced on Monday the final closing of an early-to-growth-stage fund at over $700 million, reloading its ammunition to back start-ups in the fields of technology, media, and telecommunications (TMT) and innovative consumption.The completion of the new fund took the capital managed by the Chinese investment firm to over RMB 10 billion ($1.45 billion), said Joy Capital in a statement.The company said that the fundraising attracted the continuing support of its existing limited partners, with the participation of several public pension funds and large-scale insurance companies.The company did not provide more detailed information on the investors.“Joy Capital firmly believes that the construction of new infrastructure will undoubtedly bring entrepreneurial and investment opportunities to China.
Chinese coffee chain announced on Monday that it has signed a memorandum of understanding with Kuwaiti food company Americana Group for a joint venture to expand its coffee chain business in the Middle East and India.Why it matters: This is the first time the Chinese coffee chain has announced plans to expand its operations overseas.Luckin’s expansion to the new region will extend its competition with Starbucks to more international markets.Despite its stunning rate of growth, the company is still loss-making.Expansion to more markets will add to financial pressures on the US-listed company.The agreement was signed in Beijing with government officials from both sides in attendance, underscoring government support of the deal, which aligns with Beijing’s Belt and Road infrastructure development initiative.