Is Luckin The Future Of Coffee In America – CoffeeTalk

Chinese coffee chain Luckin Coffee has opened its first two U.S. locations in Manhattan, aiming to attract customers away from Starbucks by offering mobile-only ordering and creative flavors. The chain is China’s largest coffee chain, with over twice as many locations as Starbucks in the region. 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.

Luckin’s CEO, Guo Jinyi, called the U.S. “a strategically important market” for the company’s expansion in a press release. The company has touted its ambitions to expand globally but hasn’t publicly detailed its next moves in the U.S. or other markets. 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.

How Luckin fares on Starbucks’ 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. These orange drinks, or one of their most successful, a coconut cloud latte, that’s how you get trial customers from the U.S.

Luckin faced financial troubles during the pandemic and 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.

Starbucks, on the other hand, 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’s model.

Luckin has successfully positioned itself as the “everyman’s coffee” in China, with low prices and small, grab-and-go storefronts. Starbucks CEO Brian Niccol veered away from owning the idea of the “third place” coffeehouse experience, making sure that the customer was front and center.

Read More @ NBC