Chinese chain Luckin Coffee opened its first two U.S. locations this week, betting that mobile-only ordering and creative flavors can lure customers away from Starbucks.<\/p>\n
Both new Luckin stores are based in Manhattan, and at the midtown location on Wednesday, Sam Liu took a sip of her jasmine cold brew.<\/p>\n
\u201cI\u2019ve never tried anything like it,\u201d she said.<\/p>\n
I thought I just order at the counter, but I realized everyone was standing around looking at their phone.<\/p>\n
Luckin Customer Sam Liu, New York City<\/cite><\/span><\/p>\n<\/div>\n Liu said she\u2019d hoped for more seating \u2014 the small shop has only three tables \u2014 and was initially confused by Luckin\u2019s in-app ordering system, which means customers can\u2019t order directly from a barista.<\/p>\n \u201cI thought I just order at the counter, but I realized everyone was standing around looking at their phone,\u201d Liu said.<\/p>\n Luckin is China\u2019s largest coffee chain, with more than twice as many locations as Starbucks there. Its two New York City stores are its first foray outside Asia, where it has over 24,000 locations across the region. By comparison, there are over 17,000 Starbucks in the United States.<\/p>\n Its CEO, Guo Jinyi, called the U.S. \u201ca strategically important market\u201d for the company\u2019s expansion in a press release heralding the two new locations Wednesday. \u201cWe are excited to introduce a diverse and unique coffee experience to American consumers.\u201d<\/p>\n The company, which didn\u2019t respond to a request for comment, has touted its ambitions to expand globally but hasn\u2019t publicly detailed its next moves in the U.S. or other markets.<\/p>\n The chain has gained success overseas through creative drinks like alcohol-infused coffees and fruit lattes, along with its smartphone-centric ordering model. The app-based approach makes it easier to track inventory, send personalized appeals to consumers and serve drinks quickly, said John Zolidis, an analyst who tracks Luckin and Starbucks at the brokerage firm he founded, Quo Vadis Capital.<\/p>\n \u201cLuckin was able to develop an incredible muscle with regard to product innovation, and they have been very creative in China,\u201d he said.<\/p>\n Zolidis said how Luckin fares on Starbucks\u2019 home turf will depend on its ability to differentiate its menu from other major U.S. coffee chains and smaller, independent cafes. Its American lineup already includes distinctive drinks like blood orange cold brew and coconut lattes.<\/p>\n \u201cThese orange drinks, or one of their most successful, a coconut cloud latte \u2014 that\u2019s how you get trial [customers] from the U.S.,\u201d Zolidis said.<\/p>\n Luckin faced financial troubles during the pandemic. It was delisted from Nasdaq in 2020 after its stock plunged following an internal investigation that found an executive had falsified revenue reports. The company filed for bankruptcy in the U.S. the following year but emerged from proceedings in 2022 and its sales have soared since, reaching $4.7 billion worldwide in fiscal year 2024, a 38.4% increase from 2023.<\/p>\n Luckin was able to develop an incredible muscle with regard to product innovation, and they have been very creative in China.<\/p>\n John Zolidis, Founder, Quo Vadis Capital<\/cite><\/span><\/p>\n<\/div>\n Starbucks, by contrast, is struggling in both the U.S. and China. Its same-store sales in the U.S. declined 2% and its sales in China 8% in fiscal year 2024, and it reported in April that its quarterly profit was half of what it pulled in for the same period last year. The Seattle-based chain is reportedly looking to partially sell its business in China while revamping its U.S. strategy to focus on customer experience and human connection, in contrast with Luckin\u2019s model.<\/p>\n \u201cWe veered away from, I think, owning the idea of the \u2018third place,\u2019 the coffeehouse experience, making sure that the customer was front and center,\u201d Starbucks CEO Brian Niccol told NBC News in June.<\/p>\n A Starbucks spokesperson declined to comment.<\/p>\n Zolidis said that whereas Starbucks aims in both the U.S. and China to appeal to customers looking for higher-end coffee served in an inviting setting, Luckin has successfully positioned itself as the \u201ceveryman\u2019s coffee\u201d in China, with low prices and small, grab-and-go storefronts.<\/p>\n After taking the train in from Hoboken, New Jersey, to check out the new one in midtown, Samantha Coy said the trip was worth it. She had enjoyed Luckin in China previously and was eager to order one of its fruit drinks.<\/p>\n \u201cI\u2019m surprised Starbucks hasn\u2019t tried to bring that over to the U.S.,\u201d Coy said. \u201cI hope they stay open.\u201d<\/p>\n Zolidis said he thinks Luckin is well-positioned to gain a foothold in America.<\/p>\n \u201cThey\u2019ve been able to operate and grow incredibly quickly in the Chinese market, much faster than I would have thought possible, and they\u2019ve been able to sustain it and develop a strong financial model so they can fund their expansion in the U.S.,\u201d Zolidis said. \u201cThey wouldn\u2019t be coming here to try it if they didn\u2019t think they had a shot of owning part of the market.\u201d<\/p>\n<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Chinese chain Luckin Coffee opened its first two U.S. locations this week, betting that mobile-only ordering and creative flavors can lure customers away from Starbucks. Both new Luckin stores are based in Manhattan, and at the midtown location on Wednesday, Sam Liu took a sip of her jasmine cold brew. \u201cI\u2019ve never tried anything like…<\/p>\n","protected":false},"author":1,"featured_media":1506,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-1505","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/secretstradingchoice.com\/index.php\/wp-json\/wp\/v2\/posts\/1505","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/secretstradingchoice.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/secretstradingchoice.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/secretstradingchoice.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/secretstradingchoice.com\/index.php\/wp-json\/wp\/v2\/comments?post=1505"}],"version-history":[{"count":0,"href":"https:\/\/secretstradingchoice.com\/index.php\/wp-json\/wp\/v2\/posts\/1505\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/secretstradingchoice.com\/index.php\/wp-json\/wp\/v2\/media\/1506"}],"wp:attachment":[{"href":"https:\/\/secretstradingchoice.com\/index.php\/wp-json\/wp\/v2\/media?parent=1505"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/secretstradingchoice.com\/index.php\/wp-json\/wp\/v2\/categories?post=1505"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/secretstradingchoice.com\/index.php\/wp-json\/wp\/v2\/tags?post=1505"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}