starbucks opened it The first store opened in China in 1999, when drinking coffee in a Western-style café was still a new idea to many locals. But in the years since, domestic coffee and bubble tea brands such as Luckin Coffee, Haytiya, Chagi and Mixue have gradually eroded Starbucks’ share of the Chinese market. Now, they’re crossing the Pacific Ocean in hopes of competing with the Seattle-based coffee giant and other American beverage chains on their home turf.
We wanted to experience and get a taste of what these Chinese brands are offering American consumers. Over the past week, we visited two Luckin coffee shops and a Hetty store in New York City, as well as a Chagi location in Los Angeles. We found that a new and different drinking culture is taking shape, built around speed, smartphone apps and premium flavours.
The arrival of these Chinese chains comes at a difficult moment for Starbucks. The company closed more than 600 stores worldwide this year and laid off about 900 corporate employees. New York City Mayor-elect Zohran Mamdani on Thursday urged people to boycott Starbucks as unionized baristas at dozens of its US locations went on strike. And earlier this month, Starbucks announced it had agreed to sell up to 60 percent of its China business to a private equity firm.
Luckin’s app-first model
The Chinese beverage brand that is expanding fastest in the US is Luckin, which opened five locations in Manhattan this year alone. Luckin is China’s largest coffee shop chain, with more than 26,000 stores globally. In China, there are about three Luckin Coffee shops for every Starbucks. The company was started less than a decade ago by a former tech executive and is known for its charming, app-oriented cafes.
Zei visited an outpost of Luckin in New York City’s Financial District, where he got a regular-sized Iced Coconut Latte, which cost $7.02 after tax. He says he was surprised by how quiet it was – at 4pm on a Tuesday, there were about four customers in the store. But the eerie silence had something to do with how the employees were behaving. For Luckin, customers place their orders online, so there is no need to speak to a human being.
A computer screen would alert the barista when the order arrived and print stickers to place on each cup. The only interaction with customers came when Zeyi and another man looked confused at the counter. “Is this your first time here?” an employee asked. “We do everything online here. You can order by scanning a code.” When Zei’s drink is finished, he says that the barista left it on the counter, and he had to figure out on his own which drink was his.
The next day, Zeyi visited another Luckin location in Midtown, which he says was even busier than the first store. This time, they decided to download the Luckin app—new customers who use it can get their first drink for $1.99, which is a pretty good deal in New York City. Zei ordered a cold brew, and when it was ready the barista once again said nothing.