China’s Luckin Coffee is opening its first two stores in the United States – both in New York City. Its USA app is already live on the app store.
The Chinese student community in New York have been looking forward to it – on Chinese social app RedNote there are a number of posts welcoming ‘coconut latte’ to the U.S. Coconut latte is Luckin Coffee’s top selling beverage, with 700 million cups sold since it launched in April 2021.
Luckin’s choice of New York City contrasts with Chagee, a Chinese tea chain that picked Los Angeles for its first US outlet:
This signals Luckin’s aim to go beyond just serving the Chinese diaspora — it’s targeting the mainstream coffee crowd head-on. Can it really challenge Starbucks in its own backyard?
A few thoughts:
- The U.S. is obviously a much bigger market. Starbucks has 17,122 outlets and 69% of its revenue came from the US. If Luckin succeeds in the U.S., it will at least double its size in store count and maybe more in profit;Luckin Coffee’s operations outside China started in Singapore two years ago, where it now runs more than 60 stores. Using small but cosmopolitan Singapore as a starting point is the same logic as Meituan’s Keeta using Hong Kong as a first stop in its international expansion – to test the team, organisation and product in a non-Mainland China market;Meanwhile, Malaysia — where Luckin operates through a local master licensee — is unlikely to be a major focus for the core team, and may serve as a testing ground for similar partnerships elsewhere in Southeast Asia;The company is still growing its (mainly China) store count rapidly since it crossed the 20,000 store mark in Q3 last year. As of 31 March 2025 Luckin had a total number of 24,097 stores, up from 22,340 at the end of 2024. You can watch Episode 86 of the Impulso Podcast for a more detailed analysis;Domestically in China Luckin has sufficiently stifled Cotti Coffee, a rival chain founded by the ousted Luckin founder Lu Zhengyao and former Luckin CEO Qian Zhiya. Cotti’s vow in Oct 2024 to open another 40,000 outlets sounded more like a confidence boost to current and potential franchisees, rather than a concrete business plan. Cotti has recently opened a few stores in New York City as well – in a move that is more like planting a flag;
The biggest challenge for Luckin in the US? Organisation. In our book Seeing the Unseen: Behind Chinese Tech Giants’ Global Venturing, we argue that success hinges on POP-Leadership: People, Organisation, Product, Leadership. Luckin has clear leadership and a solid product — but is the organisation ready for the scale and complexity of America? That remains to be tested;
Many mistake Luckin’s product as simply coffee. In reality, its product is its digital DNA — from product development to store operations and user engagement. Think of Luckin as an ecommerce company with physical stores as fulfillment centres. This gives it an edge in expanding into other categories (like milk tea) — unlike pure-play tea chains trying to enter coffee;This is why Mixue, now the world’s largest F&B chain with over 45,302 outlets, sees Luckin as a real threat — and has recently doubled down on selling coffee too;
Does Luckin’s coffee taste good? If you’re debating taste, you’re missing the point: it’s the business model that matters;A friend points out an interesting observation. Luckin uses the same tactic of selling the first cup of coffee at 99 cents. He said that in the past grocers and retailers would write “99¢” for promotional discounts. However, now with ecommerce “$0.99” is more common. “In a way a sign of inflation,” he said.To drum up excitement, Luckin has deployed a branded food truck touring Manhattan. Have you spotted it yet?
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