Luckin Coffee, The Buzzy Chain That Outsells Starbucks In China, Reportedly Plans A U.S. Expansion With $2 Coffee – CoffeeTalk

Luckin Coffee, a Chinese coffee chain, was banned from the Nasdaq four years ago after admitting to inflated sales by over $300 million. The scandal led to a crisis that threatened $1.3 trillion worth of stock, as regulators put pressure on auditing practices for U.S.-listed Chinese companies. However, Luckin has since recovered and has overtaken Starbucks’ outlets in China by 2022. In 2023, Luckin reported annual revenue of 24.9 billion yuan ($3.48 billion), surpassing Starbucks’s China revenue of around $3.16 billion.

Luckin may now be planning to bring its low-cost coffee to the U.S., reportedly pricing drinks between $2 and $3, starting with cities with large Chinese student and tourist populations, such as New York. The company already has at least 30 stores in Singapore and is considering further expansion into Southeast Asia and the U.S., potentially as early as the fourth quarter of this year.

Cotti Coffee, founded by Lu Zhengyao and Jenny Qian, is another discount coffee chain that has proved more aggressive in its global expansion, with outlets in 28 countries and regions including South Korea, Indonesia, and Hong Kong. Cotti opened its 10,000th outlet in Doha, Qatar last week.

However, Starbucks’s China sales have stagnated, with a 14% decline in same store sales in China in the most recent quarter. The company blamed the “macro and competitive environment” for its weak results in China. Starbucks reported $9.1 billion in revenue, a 3% drop, for the most recent quarter. Brian Niccol, the former CEO of Chipotle, has shaken up company leadership and pledged to focus on customer experience and wait times at the chain’s U.S. stores.

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