(Yicai Global) May 29 -- Half a month after its listing on the US Nasdaq Stock Market, Chinese Unicorn Luckin Coffee now has the goal of opening 10,000 outlets by 2021 to become the top brand by store count in China. 

Jenny Qian Zhiya, the company's chief executive, announced this today at a press briefing while signing agreements with six coffee-sector suppliers, tech titan Tencent Holdings' news portal reported.  

 Qian denied that the chain is positioning itself as a coffee delivery service, but rather defines itself as "quick pick-up" coffee. "Delivery costs are too high, CNY9 to CNY10 per order," she noted, adding, "Luckin uses its density of quick pick-up shops in the lobbies of office buildings or close to them to offer customers services as convenient as delivery, but at a lower cost."

Luckin's so-called pick-up stores are small austere outlets without seating areas. Take-away riders deliver the beverages ordered on the firm's app on electric bicycles or customers come in person to collect them. Cash payment is as frowned upon as ostentation.

Formed in October 2017 Luckin had 2,370 venues as of March 31 -- 91.3 percent of which were quick pick-up locations -- meaning that the coffee retailer will open about 8,000 new shops within three years and launch 220 on average each month. 

David and Goliath

Starbucks, the chain's biggest rival in the Chinese market, announced in 2018 that it was hastening its plan to open more stores in China. This calls for a total of 6,000 outlets by the end of September 2022 in the country. It now has 3,600 locations. 

Xiamen-based Luckin is now valued at over USD3 billion after its initial public offering, when its shares [NASDAQ:LK], priced at USD17, shot up at one point to nearly double at USD25 on May 22, but have been sliding since and closed today at USD16.11. 

Pundits are starting to doubt whether the company, which hands out extravagant discounts, really has the right stuff to tackle the Seattle-based coffee colossus Starbucks in a David-Goliath face-off, particularly as Luckin is a less than two year-old toddler. 

Its cash-burning strategy has drawn 16.8 million paying customers to the chain. Its investors include China International Capital and Singapore's sovereign wealth fund GIC Private.

The company's per-cup cost has already fallen to CNY13.30 this year from CNY28 last year, Qian said at the signing. It has accomplished this by economy of scale and operating efficiency. Luckin's current price for cup is CNY24, but with a coupon it is actually between CNY16 and CNY17.

The six suppliers with whom it penned contracts today are Swiss coffee machine makers Franke Holding and Schaerer, Italian syrup brand Fabbri 1905, New Zealand-based world's largest dairy company Fonterra Co-operative Group, Japan's Mitsui Foods, one of the world's top three coffee bean traders, and Taiwan-based Yeuan Yeou Enterprise, one of the biggest professional coffee roasters in Asia.

Editor: Ben Armour