Starbucks alert: This is the new Chinese coffee chain opening its new stores in New York City
China’s Luckin Coffee opens first Manhattan stores as it looks to challenge Starbucks in the U.S. with cheaper drinks and tech-driven service.
Starbucks is by some distance the biggest coffee chain in the United States, based on every metric imaginable. But could the brand be about to come under threat by a new competitor in New York City?
Luckin Coffee, the leading chain in China, opened its first two stores in Manhattan earlier in the week, which it had previously announced on Instagram, where it recently opened an account specifically for the American market.
Luckin Coffee’s colorful history of success
Since its foundation in 2017, Luckin Coffee has grown exponentially in China, and has also enjoyed success in Singapore. It even bounced back rapidly from a 2020 accounting scandal, which saw it delisted from NASDAQ, to overtake Starbucks as the biggest coffee chain in China in 2023.
According to CNN, Luckin’s drinks in China are generally around 30% cheaper than Starbucks’, with prices kept down by a mobile-app-based store model. However, the early signs are that Luckin’s products will only be marginally cheaper in the United States.
Mobile app key to Luckin business model
The Luckin app is one of the company’s defining features in Asia, helping to create a cashier-less experience in its stores, maximize efficiency and keep costs low. These are believed to be among the reasons for its huge success. However, the company has had to change tack in New York, where cashless businesses have been prohibited since 2020.
That said, the app will still have a big part to play in its stateside business model. For instance, customers who use it have been able to get their first drink for $1.99 in its two New York stores, and can enter a raffle to get a free cup of coffee every day for a year. Luckin app users were also able to take advantage of a number of prelaunch specials.
The Chinese brand will be hoping to exploit Starbucks’ recent struggles in terms of sales and revenue, which has led it to implementing a “Back to Starbucks” campaign to revitalize its image.
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