Luckin Coffee Opens First Store in New York,
Taking on Starbucks in Its Home Market
Five Years After Being Delisted from Nasdaq Due to Major Accounting Fraud
Chinese homegrown coffee brand Luckin Coffee is drawing attention as it opens its first store in New York, USA.
On the 26th (local time), The Wall Street Journal (WSJ) reported that Luckin Coffee has opened and is operating two stores in Manhattan, New York since last month. Luckin Coffee is the number one coffee brand in mainland China, having surpassed Starbucks. In New York, they have also opened stores just about 50 meters away from Starbucks locations.
There are opinions that simply opening a store in the United States is a 'miracle' for Luckin Coffee. Luckin Coffee opened its first store in Beijing in 2017 and rapidly expanded to 4,500 stores by 2019 with the goal of "surpassing Starbucks." The company was also listed on the US Nasdaq. However, when an accounting fraud scandal was revealed in April 2019, the stock price plummeted by more than 75% in a single day. Luckin Coffee was delisted from Nasdaq and filed for bankruptcy protection.
Nevertheless, Luckin Coffee aggressively increased its number of stores in China. In 2023, Luckin Coffee became the largest coffee chain in China by sales. At that time, the number of stores in China reached 16,200, more than twice that of Starbucks (6,800 stores).
After these events, Luckin Coffee has now opened its first store in the United States, the home ground of Starbucks, and is being evaluated as having fully recovered from the shock of the major accounting fraud scandal after five years.
Luckin Coffee competes with Starbucks by focusing on small stores centered around takeout and offering affordable prices. However, it is known that Luckin Coffee has set the price of an Americano in the US at a level similar to Starbucks, indicating that it will not employ an 'ultra-low price strategy.'
Additionally, customers can only order drinks through the app, allowing them to pick up their drinks without having to interact with staff in the store. This policy contrasts with Starbucks, which emphasizes communication with customers by encouraging partners (staff) to make eye contact and engage in small talk when customers order and receive their products. Luckin Coffee also offers various discount benefits such as discount coupons.
Meanwhile, the main menu item that Luckin Coffee is promoting at its New York store is the Iced Coconut Latte. An office worker who ordered an iced latte at the Luckin Coffee New York store said, "The milk flavor was stronger than the coffee flavor," but added, "If they keep giving out discount coupons, I will come back and drink it again."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
