China’s Luckin Coffee is taking on Starbucks in its home turf — and this time, it’s personal

China’s Luckin Coffee is taking on Starbucks in its home turf — and this time, it’s personal

China’s largest coffee chain, Luckin Coffee, has opened its first US stores — and it did so with audacity, choosing a Manhattan location just steps from a Starbucks. With just two locations in New York City and an ambitious app-based model, Luckin is directly challenging its former role model and current rival, Starbucks, on American soil, the Wall Street Journal reported.

From collapse to comeback

Luckin’s entry into the US marks a remarkable turnaround for a company once written off. In 2020, Luckin was engulfed in an accounting scandal that revealed more than $300 million in fabricated sales, resulting in a delisting from Nasdaq and bankruptcy proceedings. Since then, it has cleaned house, installed new leadership under CEO Jinyi Guo, and surged past Starbucks in China in both store count and sales.

Luckin’s tech-first strategy

The company’s expansion into the US mirrors its China playbook. Customers order exclusively via a mobile app, pick up drinks without interacting with staff, and enjoy heavily discounted beverages—some for as little as $1.99. The strategy focuses on speed, affordability, and gamified discounts, directly contrasting with Starbucks’s premium, café-centric experience.

A caffeinated rivalry reignited

Though Starbucks still dwarfs Luckin in size—with 17,000 US stores to Luckin’s two—this isn’t the first time the Chinese brand has fought uphill. In just six years, Luckin outpaced Starbucks in China, opening over 24,000 stores across the mainland and beyond. It achieved this by offering cheaper drinks, a faster app-driven model, and stores that were often steps away from its American rival.

Now, with Starbucks facing slowing growth and operational challenges, including long wait times and mobile order congestion, Luckin’s minimalist stores and speed-focused approach could find traction among value-seeking US consumers.

Discounts, drinks, and customer buzz

Luckin’s current US menu features iced coconut lattes, raspberry cold brews, and colourful creations like the “Pink Sunrise.” Customers in New York are responding well, many drawn in by coupons and the novelty of the brand. The company is also hiring across the New York metro area, hinting at broader US expansion plans.
Despite its limited footprint, Luckin’s branding hints at long-term ambitions. The store number on one location reads “00002,” a not-so-subtle suggestion that store numbers in the hundreds or thousands may follow.

Starbucks recalibrates as competition heats up

Starbucks, under CEO Brian Niccol, is rethinking its approach. The company has committed to speeding up orders, simplifying customizations, and reclaiming its café ambiance. In China, it has also slashed drink prices in a bid to recapture market share after dropping from 40% to 14% between 2017 and 2024.
Meanwhile, Luckin’s co-founders, ousted during the scandal, have launched Cotti Coffee—another growing rival with more stores than Starbucks in China and a presence in New York as well.

What’s next in the coffee wars?

For now, Luckin remains a tiny player in the US, but its ambition is unmistakable. If it can combine low prices, digital convenience, and novel flavours while moderating discounts, analysts say it could achieve store-level profitability in the next year or two. And as Starbucks fights to maintain its edge, New York may be just the opening shot in a new chapter of global coffee competition.