Its first two U.S. locations open Monday — both in New York City — signaling a new level of competition against Starbucks and other coffee chains like Dutch Bros., which have built strong followings among Gen Z customers with trendy, affordable drinks popular on TikTok.
Luckin’s website and social media are promoting the openings with discounts and giveaways. The stores are situated in Greenwich Village, close to the busy New York University campus, and in NoMad. Luckin did not provide any comment on the expansion.
What is Luckin?
Founded in 2017, Luckin targets young consumers through mostly takeout-only booths and cashless payments. In China, its drinks are roughly 30% cheaper than Starbucks offerings.
The minimalist store model focuses on basic service, allowing for rapid growth at lower costs. Customers place orders using their mobile phones. This approach aligns with a broader trend in the U.S. restaurant industry, which increasingly relies on mobile ordering and loyalty programs to gather customer data and encourage repeat business.
Luckin’s menu includes classic coffeehouse drinks such as cold brews, hot coffee, and matcha. Unique offerings feature iced coffees with added fruit like pineapple and raspberry, along with colorful “Refreshers” that blend coconut milk, fruity juices, and cold foams. A small selection of pastries is also available.
Beating Starbucks
Luckin’s rise has been marked by its outperformance of Starbucks in China. In 2019, Luckin surpassed Starbucks in the number of locations across the country, fueling its confidence to expand to the U.S.
However, the company’s 2019 initial public offering was derailed a year later after it admitted to fabricating earnings. This led to its delisting from Nasdaq, the dismissal of its chairman and CEO, and a $180 million fine from the Securities and Exchange Commission.
Following this setback, Luckin refocused on Asia, where it now operates over 22,000 locations in China and several dozen in Singapore.
In 2023, Luckin’s revenue in China exceeded Starbucks for the first time — a major setback for the Seattle-based chain, which continues to face challenges in the Chinese market. While Starbucks reportedly considered selling part of its China business as part of CEO Brian Niccol’s turnaround plan, the company has denied that its Chinese stores are up for sale.
Though Luckin’s model has thrived in China, it remains to be seen whether it can replicate that success in the U.S., where Starbucks has held a dominant position for more than five decades.
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