Tencent signs partnership deal with coffee startup Luckin in challenge to Alibaba-Starbucks tie-up
The market for on-demand local services has become a hotly contested field among China’s internet giants because it serves as an entry point to other services, such as mobile payments, and also provides further insight into consumer spending patterns
Tencent Holdings, the social media and payments giant, announced a partnership with Chinese coffee start-up Luckin on Thursday. The tie-up comes a month after Alibaba Group Holding’s Ele.me unit signed a partnership with Starbucks.
Luckin Coffee confirms US$200m in new funding as it aims for even faster delivery
“We hope the cooperation with Luckin coffee will create a new lifestyle of ‘smart retail’ through tie-up on user traffic, technology exploration, application scenarios and management abilities,” said Lei Maofeng, deputy general manager of Tencent's payment platform WeChat Pay. “Coffee has become a popular drink for young people nowadays and there are more coffee industry practitioners.”
The market for on-demand local services has become a hotly contested field among China’s internet giants because it serves as an entry point to other services, such as mobile payments, and also provides further insight into consumer spending patterns.
Alibaba’s Ele.me unit last month teamed up with Starbucks to do deliveries in China. The delivery service will start this fall in the key cities of Beijing and Shanghai and will expand to cover 2,000 Starbucks outlets by year’s end.
For Luckin, the cooperation with Tencent would potentially make it more prominent in the ecosystem of services offered by WeChat.
Luckin, a coffee-and-bakery chain, began operations in November 2017. It operates 1,003 physical stores in 13 Chinese cities including Beijing and Shanghai and has sold 26 million cups of coffee as of September 3. The start-up expects to operate 2000 stores nationwide by the end of this year.
