Luckin Coffee’s $7.5 million bet to boost sales ahead of rumored IPO

Gamifying China’s caffeine fix.

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Luckin Coffee’s $7.5 million bet to boost sales ahead of rumored IPO

As it reportedly plans for a US IPO, trailblazing coffee chain Luckin Coffee has launched a very generous ten-week-long promotion campaign.

Customers who buy at least seven items a week through the Luckin Coffee app will be entered into a weekly RMB 5 million (US$745,000) prize pool. The promotion will run from March 11th to May 19th, with prizes announced at 9:15 p.m. every Sunday evening.

Every week, the top 5,000 customers will evenly split a RMB 1 million weekly cash pool to each receive RMB 200, and the remaining RMB 4 million will be split among all the customers who bought at least 7 items.

Users will be able to check the Luckin Coffee app to see their ranking and the total orders of the customer in the 5,000th place. The cash prize will be distributed as electronic red packets through Luckin Coffee’s official WeChat account.

Luckin Coffee has expanded its menu with at least nine new items—in addition to its regular slate of coffee, light food, and juice—making it easier for customers to reach the seven-purchase target.

The promotion should help boost sales as the company prepares for a public listing in New York. Whispers of an impending US listing have been gaining traction since the second half of 2018. Last month, Luckin Coffee reportedly contacted Credit Suisse, Goldman Sachs, and Morgan Stanley about a US IPO, with some saying the startup could go public as early as May or June.