New Starbucks rival just won't let up

Luckin Coffee could have opened its first stores anywhere in America. China's biggest coffee chain chose a New York City spot less than 200 feet from a Starbucks.

- Hannah Miao & Heather Haddon

From there, Luckin is serving up coffee drinks from a flat white to a raspberry cold brew, really fast, ordered on its mobile app whose coupons may be as addictive as caffeine.

Armed with iced coconut lattes, it has the makings of a deliciously audacious corporate rivalry. Luckin has just two U.S. stores, which opened June 30 in Manhattan, compared with Starbucks's 17,000 U.S. locations. Then again, in China, Luckin didn't exist when Starbucks arrived and spread coffee culture—and it overtook Starbucks in six years.

"This is just the beginning," Luckin said on Instagram. "NYC, we're here."

That Luckin has appeared in New York is pretty amazing. The company was left for dead in 2020 after an accounting scandal during which it faked more than $300 million in sales. That was the last time it made news in the U.S. Now, it's on Starbucks's home turf just as the American coffee giant is trying to turn around under new leadership after five consecutive quarters of declining same-store sales.

Founded by Chinese tech entrepreneurs, Luckin is a master of the gamification that 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 (three-minute and five-minute waits on two recent morning orders). Customers pick up their drinks at the counter without having to interact with another person.

Mobile app orders have been maddening for Starbucks leadership. Customers coming in to pick up their mobile orders were overwhelming its cafes ("a mosh pit," as Starbucks founder Howard Schultz complained) and spoiled the leisurely, premium vibe Starbucks thrives on. Still, they fueled much of the chain's business.