Starbucks’ Chinese rival Luckin Coffee entered the U.S. market this week, launching its first two locations in New York City.
The locations at 755 Broadway in Greenwich Village and 800 6th Ave. in Chelsea, mark the company’s first foray into capturing U.S. customers. One of its first patrons, in fact, drove 22 hours from Florida to New York just to be first in line, the company posted on Instagram this week.
“THANK YOU to everyone who showed up and showed love today. We felt the support in every sip,” the company posted. “This is just the beginning. NYC, we’re here.”
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New York City resident Courtney Kraft told FOX Business that she has stopped by both locations every day over the past three days. Kraft said she came specifically because of the company’s success in China as well as her interest in coffee and matcha. Each time, she said, the shops were buzzing with people.
“Demand was consistent over the past three days. Both locations ran out of oatmilk and other milks at least once,” Kraft said, adding that the company equipped both locations with a ton of employees in anticipation of high demand.
The company, headquartered in Xiamen, China, hinted at its arrival on Instagram last week, posting a picture of its logo inside a New York City subway station. The caption read, “Drip level: International. The rumors are true, NYC. You’re luckin now.”
Luckin Coffee has long been considered a threat to rival chains such as Starbucks as it has become the fastest-growing chain in China. In 2020, the chain dealt with a rough patch as it ousted senior executives following an internal investigation of sales fraud. Today, it’s expanding rapidly. In its latest fiscal quarter, which ended in March, revenue jumped 41% to $1.2 million.
The company scaled to 24,097 stores in China, Singapore and Malaysia during the first fiscal quarter of 2025. However, the bulk of its locations, over 22,000, are still concentrated in China.
In the three-month period, it opened 1,743 stores in China, including five stores in Hong Kong, six stores in Singapore and eight stores in Malaysia, equating to a store unit growth of 7.9% from the total store count as of the end of the fourth quarter of 2024.
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The company says its self-operated stores saw sales rise 8.1%, “reflecting rising customer demand as well as the effectiveness of our development strategy,” according to co-founder and CEO Dr. Jinyi Guo.
“Capitalizing on China’s booming coffee market, we will strategically focus on gaining market share by continuing to offer high-quality products at competitive prices. Backed by our customer-first core values, we strive to strengthen our leadership position through leveraging our scale advantage, high product quality and compelling value proposition, driving long-term sustainable growth.”
Luckin did not immediately respond to FOX Business request for comment.
At the same time as Luckin continues to expand, Starbucks has been reinventing its own strategy to draw back customers under CEO Brian Niccol.
Shortly after Niccol took the reins in September, the company launched a “Back to Starbucks” strategy aimed at reverting the company back to its coffee house roots. The plan includes streamlining its menu, reducing service times and redesigning stores to encourage customers to stay longer.
Niccol is not only working to boost profitability, but to improve the work environment after the company faced years of growing pressure from unionization campaigns nationwide and consecutive disappointing fiscal quarters as traffic declined.
In April, however, the company reported disappointing comparable sales and profit, though Niccol believes the company was where he expected them to be at this point in the turnaround.
“Our financial results don’t yet reflect our progress, but we have real momentum with our ‘Back to Starbucks’ plan. We’re testing and learning at speed and we’re seeing changes in our coffeehouses,” Niccol said in a statement during earnings.
FOX Business reached out to Starbucks for comment.
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