AmiSight 8/4: Starbucks Faces a New Challenger in Its Own Backyard

Ami Kassar
Aug 4
1 min read

According to The Wall Street Journal, Starbucks has faced stiff competition in China – now that rival has set up shop in New York.

Luckin Coffee, which overtook Starbucks as China’s biggest coffee chain by sales in 2023, recently opened its first U.S. stores in New York. Luckin is showing off its mobile app and low prices, areas where Starbucks has struggled.

Although Luckin's U.S. footprint is small with two stores– compared with Starbucks’s 17,000 U.S. locations – it only took the company six years to overtake Starbucks in its home market.

Luckin's success is credited to its gamification tactics which is common among Asian retailers. Luckin customers must order on its app, where they are showered with coupons, including $1.99 drinks for first timers in New York. The app gives a pickup time and texts when the drink is ready.

This model may put pressure on the new Starbucks CEO Brian Niccol to accelerate mobile ordering. When he joined the company a year ago, he suggested separating mobile pickup queues from cafe dwellers, and placing some limits on how much people could customize their drinks.