Five years after a financial scandal halted its Nasdaq ambitions, Luckin Coffee has yet to return to the US stock market, but it has landed in New York.
On June 30, the Chinese coffee chain opened its first two brick-and-mortar locations in Manhattan, at 755 Broadway and 800 Sixth Avenue. To mark the launch, Luckin offered a USD 1.99 promotion for app orders on opening day. Local customers said the stores featured many of the brand’s signature drinks, along with new items such as raspberry cold brew. A limited selection of baked goods, including bagels, cookies, and chocolate cake, was also available.
Notably, Luckin tested the waters in New York ahead of the grand opening. From June 20–24, the company staged four pop-up events at areas with high footfall: Union Square, SoHo, Madison Square, and Herald Square. These sites, popular with trendsetters, office workers, and tourists alike, were chosen for their visibility and buzz.
The pop-ups aimed to encourage app downloads and boost brand visibility. Onsite staff walked attendees through the registration process, which required basic information like name, phone number, and email. Each participant received a free cup of coffee and a chance to win “free coffee for a year.” Those who followed Luckin’s social media accounts and posted tagged content were also given branded tote bags.
This mix of online engagement and offline perks appeared to resonate. Despite the summer heat, the events drew large crowds. At the Madison Square pop-up on June 22, a line stretched from the coffee truck on Madison Avenue to East 36th Street.
Still, the crowds didn’t descend into chaos. “There were maybe 70 or 80 people ahead of me, but the line moved fast,” said Keke (pseudonym), a recent graduate. She noted that operations were well organized, with staff split among order-taking, drink preparation, and giveaway duties. To keep lines moving, drinks were prepared in advance, which meant customers couldn’t adjust sweetness or milk levels. “It took a little away from the overall experience,” she said.
Keke also observed that Luckin had recruited a notably diverse team of volunteers, many of whom were Black or Latino. This may have helped the brand catch the attention of a broader set of passersby. Still, the majority of attendees appeared to be Chinese, with an estimated 70% of those in line comprising Chinese students or professionals. The rest were a mix of locals and tourists.
In both its temporary and permanent locations, Luckin avoided opening in areas with dense Chinese populations such as Flushing. Instead, it chose central neighborhoods that attract a more diverse crowd, a clear sign of its ambition to compete in the broader US market.
That intention didn’t go unnoticed. US mainstream outlets like CBS News and the New York Post covered the launch. CNN even ran a headline: “Watch out, Starbucks: China’s biggest coffee chain opens its first US locations.”
According to a representative from US food consultancy Wefood, Luckin’s current store placements aren’t in prime locations like high-end shopping centers, they are positioned in urban areas with steady foot traffic. These areas offer a better balance between rent and reach. “That reflects a certain confidence in their branding, pricing, and ops fundamentals,” the consultant told 36Kr.
She added that the company seems committed to direct operations rather than franchising. Luckin began recruiting management trainees well ahead of the launch and trained its first store managers at a facility in New Jersey. “That caught our attention,” she said. “It shows they are not just looking to license the brand out and scale via franchises. They want to own this.”
Still, New York is one of the most competitive coffee markets in the country. Both new Luckin stores are surrounded by dozens of cafes. A glance at Google Maps shows a dense network of rivals, including its largest competitor: Starbucks. “In Manhattan, you can’t really avoid Starbucks,” the Wefood consultant said.
The US is among the world’s largest coffee markets. According to Coffee Finance, Americans drink 400 million cups of coffee daily. In 2023 alone, the industry generated nearly USD 85 billion in revenue. About 150 million Americans—almost half the population—drink coffee regularly, with 60% having one to two cups per day and 36% drinking three to five. In one survey, 73% said they drink coffee daily.
That widespread consumption creates opportunities for new players.
“There are actually more local coffee chains here than people realize,” said CC (pseudonym), a Chinese grad student based in New York. “A lot of folks coming from China only know Starbucks, but there are hundreds of other brands here, some with hundreds of locations just in New York.” Still, she welcomed Luckin’s arrival. “It’s refreshing. They have more experimental flavors like sparkling fruit coffees that you just can’t get at Starbucks.”
However, flavored or novelty coffees are still a niche category in the US. Most local consumers prefer classic high-caffeine options such as Americanos or cold brew and care about bean quality. Even so, the Wefood consultant believes Luckin could find an audience, particularly if it begins by targeting Asian and Asian-friendly communities. “Establish a base first, then branch out,” she said.
A bigger hurdle may be the cost of operating in the US. In China, Luckin became the market leader in 2023 by underpricing Starbucks, offering drinks for as little as RMB 9.9 (USD 1.4). That model is far harder to replicate in the US, where labor and rent are much costlier.
“One tea brand tried expanding here, but two of its franchise stores closed in just one year,” the Wefood consultant said. “The low-cost model doesn’t hold up here. Many franchisees only realize after signing on that labor costs eat up margins and stretch out the payback period.”
To address this, Luckin is likely leaning on its app-heavy model to reduce staff needs. The current USD 1.99 promo is limited to two drinks per user and only runs through July. After that, pricing may revert, and that’s when the challenge begins.
At full price, a 16-ounce cold brew at Luckin costs USD 4.95, slightly more than Starbucks’ USD 4.75. Other Luckin drinks range from USD 5–7, offering little price advantage.
CC said that gives her pause. In China, Luckin built its customer base through steep discounts, but it’s unclear whether that approach can continue in the US. “Cotti tried coupons too when it entered the US, but they have stopped now. Drinks are back to USD 4–5 each.”
Despite liking Luckin’s flavors, CC said she wouldn’t pay USD 6.75 for a single cup. “In a city like New York where coffee options are everywhere, price really determines whether we step in or walk past.”
Beyond pricing, Luckin also faces regulatory friction around its app-based model.
The company was designed for digital ordering and in-store pickup, but that approach faces limitations in the US. Since late 2020, New York has banned cashless-only businesses. Cities such as San Francisco and Philadelphia have similar regulations.
“US laws prioritize equal access to commerce for seniors and the disabled,” the Wefood consultant said. “If someone can’t use a smartphone or needs help at the counter and doesn’t get it, the store risks legal action or shutdown.”
She noted that Luckin’s app requirement frustrated some visitors. “People walked in, realized they had to download an app and enter a phone number, and just left unhappy.”
Her advice to Chinese brands eyeing the US: rethink the default playbook. “What works in China isn’t gospel here,” she said. “Especially for experienced founders, there’s a temptation to stick with what worked at home. But it might not hold up.”
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Xiao Sijia for 36Kr.