Other than coffee, Luckin now wants to sell merchandised cups in China

Luckin is taking a page from the likes of Starbucks to sell coffee mugs as an extra revenue source.

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In a recent move that looks like both taking a page from Starbucks and tapping into the local celebrity economy, Chinese on-demand beverage chain Luckin Coffee has entered into an agreement with Zhejiang-based thermos and water bottle maker Haers to co-develop Luckin-branded coffee mugs, the latter said in a filing with the Shenzhen Stock Exchange on Tuesday.

The agreement will last for three years and the products will be sold mainly through Luckin’s app, nearly 3,000 bricks-and-mortar stores, as well as online stores on Tmall and JD.com, according to Haers, the sole listed company in the cup-and-bottle manufacturing industry in China.

Shares of Haers rose by 10% to RMB 6.36 soon after it opened Monday, the upper limit one stock is allowed to advance via the Shenzhen bourse. The price maintained till the morning session closed.

KrASIA checked out Luckin’s flagship online store on JD.com which went online last month, and found out it’s selling Luckin-branded coffee mugs featuring Chinese celebrities such as Liu Haoran or Zhang Zhen.

The cups featuring Liu are well-received among JD customers with warm comments from buyers, who appear to be mostly students and young women.

Many coffee chains, such as Starbucks and Stumptown Coffee, have their own branded merchandise lineups too, bringing extra revenue beyond the core business of just selling coffee.

The mug maker tie-up is expected to help Luckin diversify its revenue sources, as the company is still recording big  loss despite decent revenue.

Luckin Coffee booked RMB 870 million (USD 126.7 million) in total net revenues in the second quarter of this year, up by 698% year-on-year.

However, the company still bleed RMB 681.3 million in net losses, widening more than 100% from RMB 333 million in the second quarter of 2018, partly due to sales and marketing expenses, which reached RMB 390.1 million, up 119.1% year-on-year.

36Kr is KrASIA’s parent company