2 days ago
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Name: Luckin.
Age: Seven – it was founded in October 2017.
Appearance: 20,000 locations and counting.
Locations doing what? Serving coffee. It’s a giant coffee chain.
Oh yeah? If it’s so giant, how come I’ve never heard of it? Because it started in China.
Isn’t China better known for tea? Yes, but they have drunk a lot more coffee since Starbucks opened its first outlets there in 1999. Luckin overtook Starbucks as China’s biggest coffee chain in 2023.
If Chinese people want Chinese coffee, so be it. It’s a big world. Luckin knows that, which is why it has just opened up two outlets in New York City, on Starbucks’ doorstep.
It’s aiming for global domination? It certainly looks like it. “This is just the beginning,” Luckin posted on Instagram. “NYC, we’re here.”
But why would I go to Luckin when I can go to Starbucks? For a largely frictionless technological experience. It has an app-based ordering system, no cashiers and hardly any seats. You just grab your latte and go.
Is the coffee any better? If you really cared about coffee, you wouldn’t go to either of these places.
But Starbucks is home of the caramel macchiato, the pumpkin spice latte … Luckin is known for bestsellers like the coconut latte, the velvet latte and apple fizzy americano.
Apple what? That’s apple juice, fizzy water and coffee, over ice.
What is Starbucks doing to fend off the Luckin threat? It is closing a bunch of stores.
A bold strategy, if a little counterintuitive. The company plans to phase out its 90 or so “mobile-order-only” locations in the US, to concentrate on “community coffee houses” and a more personal customer experience.
So it’s going in the exact opposite direction to Luckin. It seems so. It has plans to refurbish existing locations, and it is going back to writing your name on the cup.
A warm, friendly, welcoming atmosphere versus zero human interaction? I’m torn. If it helps you make up your mind, Luckin is also engaging in furious promotional discounting, selling $1.99 coffees in a city where a $6 cappuccino is not uncommon.
Starbucks is doomed. That’s a little premature. Luckin reported $4.7bn in sales last year, compared with $36.2bn net revenue for Starbucks.
Still, a remarkable rise for the Chinese upstart. All the more remarkable after a 2020 false accounting scandal caused its stock price to collapse, driving the company into bankruptcy in the US. It emerged from bankruptcy in 2022, having replaced its top brass and received huge cash injections from a private equity firm.
Do say: “Good morning, young barista. One of your legendary handcrafted flat whites, please.”
Don’t say: “You know what I miss? Vending machines.”
