Starbucks Faces Threats On Two Fronts As Luckin And Chagee Plan Ambitious US Expansions – CoffeeTalk

Chinese bubble tea chain Chagee is set to open its first U.S. store in Westfield Century City in Los Angeles this spring, while the company has also filed for a U.S. initial public offering on the Nasdaq. Meanwhile, fellow Chinese beverage giant Luckin Coffee may be planning to bring its low-cost coffee to the U.S., initially with a New York store. It will reportedly price drinks between $2 and $3 and aims to launch in cities with large Chinese student and tourist populations.

If Chagee is successful and goes public on the Nasdaq, it will join a decreasing number of Chinese companies that have sought a U.S. listing, as relations between the White House and Beijing continue to remain chillier than an iced tea. Fast fashion retailer Shein failed to materialize amid regulatory and compliance questions from lawmakers, and the Gen Z favorite is now planning a London IPO for later this year, although that has not yet completed.

Luckin Coffee’s original listing was controversial, as it was founded in 2017 and grew rapidly to outnumber Starbucks locations in China within two years and then went public on the Nasdaq. However, in 2020, Luckin disclosed that it had inflated its sales, resulting in its delisting from the Nasdaq. The company filed for Chapter 15 bankruptcy and emerged from administration during 2022, but without the executives who had been responsible for the original accounting fraud. Since then, it has gone from strength to strength and overtaken Starbucks as China’s largest coffee retailer by sales.

Chagee, founded in 2017, has grown quickly to more than 6,400 teahouses across China, Malaysia, Singapore, and Thailand, with around 97% of its locations in its home Chinese market. If its IPO is successful, the business will use the ticker CHA. Founder and CEO Junjie Zhang said that Chagee aimed to modernize tea drinking after being inspired by the success of international coffee companies.

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