The Chinese coffee chain startup, which opened its first shops just last year and has seen rapid expansion, plans to continue offering customers steep subsidies and discounts despite totting up nearly Rmb 900 million ($130 million) in losses.
The comments, made by a Luckin Coffee spokesperson to TechNode, show that the company is sticking to its market share-grabbing business model, as it vies to challenge industry leader Starbucks.
According to data reported by local media outlet QDaily, Luckin was Rmb 857 million in the red for the first nine months of the year. Luckin themselves, expect the figure by year end to be much higher and “in line with the forecast by the management team.”
Luckin hopes that its cash-bleeding approach will pay off in a few years’ time, however. The company expects to turnover Rmb 18.5 billion by the end of 2021, up from Rmb 763 million in 2018.