Starbucks rival in China, Luckin, debuts in NYC

The coffeehouse that beat Starbucks in China, Luckin Coffee, opened its first US stores in New York City yesterday. The brand is targeting young, tech-savvy coffee drinkers with minimalist store formats, mobile-first ordering, and drinks priced about 30% lower than Starbucks.

Founded in 2017, the coffee chain rapidly expanded, overtaking Starbucks in China by 2019 with 22,000+ stores and dozens more in Singapore. Its drinks sell for about 30% less than Starbucks’, fueling its popularity.

However, Luckin’s rise hit a roadblock in 2020 when it was delisted from Nasdaq and fined $180 million by the SEC for fabricating earnings. Following a leadership shakeup, the company doubled down in Asian markets.

In 2023, Luckin’s revenue in China surpassed Starbucks for the first time.

Meanwhile, Starbucks is struggling to revive its sales. The chain announced laying off 1,100 corporate jobs in February as new CEO Brian Niccol attempts to reverse four consecutive quarters of declining global and US sales.

Starbucks is also reducing its menu offerings by 30% and focusing on its best-selling items and cafe vibes to attract more customers. It recently denied reports of selling part of its Chinese business.