Luckin Coffee brews big plan for US market

Luckin Coffee Inc marked its official entry into the United States with the soft launch of two pickup-only stores in New York City on Monday, signaling the Chinese coffee chain's global ambitions as it eyes a slice of the world's largest and most mature coffee market.

The two locations — one in Midtown Manhattan and another near Washington Square Park, adjacent to New York University — opened to customer traffic on their first day.

Positioned in high-footfall areas popular with students, professionals and tourists, the stores signal Luckin's strategy to test its digital-first, value-oriented model in an intensely competitive and saturated market long dominated by Starbucks and local coffee brands.

"The US is a strategically important market in Luckin Coffee's global layout," said Guo Jinyi, cofounder and CEO of Luckin Coffee.

"We aim to bring more diverse coffee options and fresh consumer experiences to the US market through our rapid product innovation, digital operations and quality supply chain."

Designed around its grab-and-go model, the US stores are equipped with smart coffee equipment, enabling staff to customize orders efficiently by scanning codes, said the company. The chain has also integrated local payment options, including Apple Pay and PayPal, into its application to streamline the ordering and pickup experience, according to Luckin.

Luckin is offering new users beverages for $1.99 through its app during July — limited to two per user — and is promoting the launch with a "free coffee for a year" lottery, branded pop-up buses and collectible merchandise giveaways.

Still, the pricing strategy raises questions. A 16-ounce cold brew at Luckin is priced at $4.95 — 20 cents more than Starbucks. Other menu items range from $5 to $7.

Luckin is combining its Chinese-market favorites with new, localized offerings. In addition to staples like lattes and Americanos, the chain offers velvet latte and coconut latte, as well as new cold brew innovations like mango coconut sunrise and dreamy strawberry.

The company said it is leveraging its tech-driven inventory and order management system to maintain product consistency as it ramps up overseas operations.

Jason Yu, general manager of CTR Market Research, said Luckin Coffee's app-based ordering and pickup model aligns well with the growing acceptance of digital ordering among US consumers, especially busy office workers in New York who value efficiency and time savings.

"However, it's crucial to cultivate consumer interest in flavored coffee to stand out," said Yu. "Given the distinct consumer habits and higher operational costs in the US, a low-price strategy is unlikely to be sustainable. Building product strength, delivering a quality experience and creating a sense of value will be key to long-term success."

By the end of the first quarter of 2025, Luckin operated 24,097 stores globally, and posted a gross merchandise value of over 10.4 billion yuan ($1.4 billion).

Luckin isn't alone in its international push. Chagee, a premium tea brand, entered Indonesia in April with a store in Jakarta that sold over 10,000 cups in three days. The company followed with its first North American store in Los Angeles in May, which sold 5,000 cups on opening day.

Heytea, another upscale tea brand, has made its own foray into the US with more than 20 stores since launching its flagship Times Square LAB store in February. Budget-friendly competitor Mixue Group operates over 4,900 stores overseas — mostly in Indonesia and Vietnam.