The ongoing coronavirus outbreak (WHO:COVID-2019) is significantly changing the behavior of Chinese consumers. Instead of going out to restaurants or shopping for groceries, consumers prefer their food and beverages be delivered in a manner that minimizes human contact.
To cope with the coronavirus outbreak and provide safer services, China’s largest coffee chain, Luckin Coffee (Nasdaq:LK), has delivered its unmanned coffee machines in Wuhan hospitals. The first unmanned Luckin coffee machine was set up on February 12 in Wuhan No. 672 hospital. The unmanned Luckin coffee EXPRESS and Luckin popMINI were launched on January 8 as part of the company’s ambitious plans to broaden its unmanned services. Luckin Coffee said it will provide free drinks for the healthcare professionals in Wuhan hospitals, as the healthcare professionals heavily rely on caffeinated drinks.
Luckin’s coffee EXPRESS is an unmanned coffee machine that can be quickly installed anywhere. Customers can place their orders on the Luckin app and scan the pickup QR code on the machine, and then grab their fresh drink moments later. Customers can also pick up their drinks utilizing facial recognition technology, minimizing their phone use and the chance of infection. According to Luckin, the customer-facing machines are in fact the second generation design which feature automatic cup placement and lid closing capabilities. The machines, which offer store-quality drinks safely and conveniently, are manufactured by Schaerer. Furthermore, they have been deployed in a shorter amount of time than it would take to open stores. The entire unmanned process minimizes contact as compared with normal stores, where potential exposure can occur during staff-customer communication, payment, and pickup.
Currently, there are millions of people working day and night to safeguard their cities from the spread of coronavirus. If the self-service coffee machines can be quickly deployed in critical locations such as highway exits, community centers, office buildings, factories, hospitals, and health clinics, they can offer these hardworking people the essential boost they need to power their day.
Luckin popMINI works like other vending machines that sell snacks, beverages, and quick bites. Customers can order on the Luckin app, scan the code, and then snatch their food and drinks. The vending machines offer products from well known brands such as PepsiCo, CJ, COFCO, and Calbee. Luckin claims the prices of its popMini products are as cheap as those normally found on popular e-commerce sites, which makes the machine stand out among its competitors. The vending machines also provide portable phone chargers rental services. If one has to wait an extended period of time in some public facilities such as hospitals or transportation hubs, the chargers can be very helpful.
Since 2016, more and more unmanned vending machines and grocery stores have popped up in China. Customers can walk into the unmanned stores any time of day. Zero interaction with staff means customers spend less time in the stores. Customers can pre-order products on their phones and save time checking out. The unmanned self-service stores are becoming an increasingly popular retail business model. According to the China Unmanned Retail Industry Research Report, the total market size of unmanned retail stores is expected to reach CNY 3.3 billion by the end of 2020. Bian Li Feng and Bingo Box, two unmanned self-service grocery chains, have become very popular over the last couple years. Bingo Box, for example, has received USD 94.7 million over two rounds from multiple investors including Fosun Capital and GGV Capital.
Already, one unmanned self-service store has appeared in the 1000-bed, 25,000-square meter Huoshenshan Hospital, the Wuhan facility that was built in 10 days and opened on February 3. The unmanned grocery store inside the hospital uses a check out system powered by Alibaba’s Taoxianda that was set up within 48 hours. The Leishenshan Hospital, opened on February 8, will reportedly also feature an unmanned grocery store.
If Luckin Coffee can quickly roll out its coffee EXPRESS and popMINI services to more cities outside Wuhan, it stands to get a headstart on its competition.