Who is Luckin Coffee, the Chinese Starbucks that is shaking up the rules of “on-the-go” coffee?

A Chinese coffee giant little-known in Europe, Luckin Coffee is opening its first stores in the United States. And it's creating a buzz in New York. Both its offerings and its model are disrupting traditional conventions.

Photo : Luckin Coffee (press)

For the past few days, New Yorkers have been talking about nothing else. Its original flavors. Its low price. The shopping experience. Its origins... With two openings in New York, the Chinese coffee chain Luckin Coffee is already creating a buzz. This extremely popular chain in China has just set up shop in the United States for the first time. Two openings in Midtown Manhattan. These are the very first locations outside Asia for the Chinese coffee giant. This deployment marks a strategic shift for the brand, which is looking to test its model internationally after recovering from a financial scandal.

But who is this little-known giant in the West that thinks it can snatch up Starbucks and all the other coffee players? And what are its methods?

1. A giant in China

Luckin Coffee boasts more than 24,000 locations, more than double that of Starbucks in its own domestic market. Launched in 2017 in Beijing, Luckin Coffee previously operated exclusively in Asia: China, Singapore, and Malaysia. With a $200 million fundraising round, the firm launched no fewer than 1,800 locations in a single year, directly surpassing the Costa Coffee chain in terms of the number of locations in its territory. The firm quickly adopted an aggressive growth strategy, burning far more than it generated, to gain market share in China. As early as 2019, it unveiled its ambition to climb to 2,500 points of sale to surpass Starbucks in China before following up with a fundraising round and an IPO.

But a financial scandal erupted: the firm allegedly inflated its figures, its stock was suspended, and its COO at the time was even questioned. According to the Wall Street Journal, it was only after a bankruptcy filing in 2022 that the company was able to be relaunched, with new management and new shareholders. Today, the firm is once again listed on the stock exchange and has a total market capitalization (at the time of writing) of approximately $10 billion. And Luckin has refocused its operations, strengthened its franchise-based model (more than 90% of points of sale), and multiplied its revenues.

2. A digital experience

In its new New York stores, as in China, there are no payment counters or voice ordering: everything is done through the brand's mobile app, from product selection to pickup, including payment, of course. The "digital-only" model is part of Luckin Coffee's DNA. It obviously streamlines operations, reduces staff costs, and also offers a personalized experience to users. In China, many "establishments" are quite small and have no seating, fully relying on the "on-the-go" approach.

3. A different product offering

Added to this is an unusual beverage offering that sets it apart from Starbucks, Costa Coffee, and all other similar competitors. The brand is known for its blends of coffee and... fruit. Its assortment boasts some bestsellers like the jasmine and dragon's blood cold brew, as well as the coconut and pineapple latte. These are all references that stand out from the Starbucks catalog.

4. A low price

Luckin Coffee also largely bases its positioning on extremely low prices. Apparently, it's on average 30% cheaper than Starbucks, its best-known rival. In fact, it's already possible to get a coffee for less than $2...

What ambitions?

While the company remains discreet about its expansion plans outside of Asia (and now the USA), several markets have been mentioned as priority targets, including Japan, South Korea, Canada, and the United Kingdom. Continental Europe is not explicitly listed on the roadmap, but the implementation logic could easily apply there: small stores, without any real front-office staff, and very competitive prices.

Faced with a declining Starbucks, Luckin could capitalize on the fatigue of a model deemed too expensive or too standardized. The challenge will be to see if its flavor innovations and technological efficiency can translate into loyalty in a Western market that is less "mobile-centric" than China. By tackling New York first, Luckin is choosing the most competitive but also the most visible arena. If the test proves conclusive, expansion into other American cities will materialize, and an arrival in Europe would then only be a matter of timing.