Tencent teams with cafe startup Luckin Coffee

Tech giant Tencent Holdings has formed an exclusive partnership with local cafe startup Luckin Coffee.

The partnership will potentially result in the development of new robotic technology for fast customer order fulfilment and facial recognition systems to process payment via WeChat Pay. The venture is expected to serve as a lead to other potential ventures for Tencent based on insights into consumer behaviour uncovered through the course of business.

Lei Maofeng, deputy GM at WeChat Pay said the company hopes 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. Coffee has become a popular drink for young people nowadays, and there are more coffee industry practitioners.”

Luckin has expanded rapidly since opening late last year with an eye to disrupting Starbucks’ successful business in China, opening new venues at a rate of more than two per day, hoping to hit 2000 locations by the end of the year. Its business model is based on low prices and fast delivery times for customers at home or office.

Luckin’s e-commerce model allows customers to select the type of beverage and add-ons online, giving it a core advantage over its arch-rival – although with Starbuck’s recent partnership with Tencent’s own competitor Alibaba, it is expected to roll out a delivery service shortly.

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