China’s largest coffee chain opens the first branches in the USA

China’s largest coffee chain opens the first branches in the USA

Luckin Coffee, the rapidly growing chain that Starbucks overtaken in China, now also enters the US market. The first two branches open in New York City on Monday and thus increase competition against Starbucks and other coffee chains such as Dutch Bros., who successfully built a loyal followers at Generation Z. These chains rely on trendy, tictok-worthy drinks at affordable prices.

The opening of the first branches

The openings are via the Website by Luckin and their Social-Media-channels advertised with discounts and competitions. The new locations are located in Greenwich Village, near the busy campus of New York University, and in the Nomad district. Luckin did not react to a request from CNN.

What is Luckin Coffee?

Luckin Coffee was founded in 2017 and specializes in a young target group. The chain mainly offers to-go services and focuses on cashless payments. Your drinks are about 30% cheaper in China than that of Starbucks. The minimalist business only offer the most basic services, which enables the company to expand quickly and inexpensively. It is also necessary for customers to give up their orders via mobile devices. Also in the US restaurant business, the trend towards mobile orders and loyalty programs increases, which enables companies to collect extensive customer data and promote recurring visits.

The menu of Luckin Coffee

The menu of Luckin is filled with typical coffee house classics, including cold brews, hot coffee and matcha options. Special articles include ice -coffeeed with fruity additives such as pineapple and raspberries as well as a line of colorful "refresher" that combines coconut milk, fruity juices and cold foams. A small selection of pastries is also offered.

The competition with Starbucks

A remarkable development was Luckin's dominance about Starbucks in China. The number of Luckin branches in 2019 exceeded Starbucks, which gave the company to plan an expansion to the USA.

In 2019, the company applied for an initial public offering. But a year later, it had to accept a setback when the company admitted that its income were fake. Luckin was then made by the Nasdaq Delistet, and both the then chair as well as the CEO were released. In addition, the Securities and Exchange Commission imposed a fine of $ 180 million

In 2023, Luckin's sales in China exceeded the first time from Starbucks-a considerable minus for the Seattle coffee chain, which continues to be difficult to establish itself on the Chinese market. According to reports, Starbuck's buyer had for a part of its china-business. This was done as part of CEO Brian Niccol’s Restructuring plans , although the company has now been for sale.

Although Luckin's formula works in his homeland, it remains to be seen whether this success also repeats itself in the USA - especially since Starbucks is over 50 years of lead.

Laura He contributed to this report.