The immensely popular Chinese cafe chain Luckin Coffee opened its first two US branches on Monday, CNN reports. Both are located in trendy parts of Manhattan, New York City – one in Greenwich Village and the other in Chelsea.
Often described as China’s answer to Starbucks, Luckin Coffee charges about 30 percent less than the US-headquartered multinational for comparable coffees in the mainland – Starbucks’ second biggest market. In 2019, it overtook Starbucks in terms of Chinese store numbers. In 2023, Luckin’s revenue in China surpassed Starbucks’ for the first time.
Now the Xiamen-headquartered company is taking on Starbucks on its home turf. Demand for the latter has been falling in the US, with same-store sales dropping for the fifth straight quarter earlier this year, CNBC reported. Consumers’ frustration with its high prices has been given one reason for the decline.
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Luckin Coffee was founded in 2017 and has already expanded into Singapore and Malaysia. The company, which primarily targets young people, is known for its cashless stores that require customers to use an app to order and pay for drinks. While all of its Chinese stores are cashless, New York City regulations prohibit this model of business.
In 2020, Luckin Coffee was embroiled in an accounting scandal that saw it delisted from Nasdaq and fined US$180 million by the US Securities and Exchange Commission for fabricating sales figures. It has undergone a significant restructure since declaring Chapter 15 bankruptcy (designed for cross-border insolvency cases) in the US in 2021.
In the lead up to its US stores’ debut this week, the coffee chain has been offering discounts and giveaways via social media.
