Chinese Beverage Chains Challenge Starbucks in the US
▼ Summary
– Starbucks faces growing competition in China from local brands like Luckin Coffee and Heytea, which are now expanding into the US market.
– Chinese beverage chains are introducing a new culture in the US focused on speed, smartphone apps, and premium flavors.
– Starbucks is currently struggling with store closures, layoffs, union strikes, and selling a majority stake in its China business.
– Luckin Coffee is expanding rapidly in the US with an app-first model that minimizes customer interaction and streamlines ordering.
– Luckin’s US stores offer promotions like $1.99 drinks for new app users and operate with minimal staff-customer communication.
A new wave of Chinese beverage chains is making its presence felt in the United States, directly challenging established players like Starbucks. Brands such as Luckin Coffee, Heytea, Chagee, and Mixue, which have steadily grown their market share in China, are now expanding into American cities. These companies are introducing a distinct approach to coffee and tea service, emphasizing digital ordering, competitive pricing, and unique flavors that appeal to modern consumers.
Our team recently visited several of these outlets to see firsthand how they operate. We stopped by two Luckin coffee shops and one HeyTea store in New York City, plus a Chagee location in Los Angeles. Each visit revealed a beverage culture centered on efficiency, smartphone integration, and high-quality ingredients, a noticeable shift from the traditional café experience.
This expansion comes at a challenging time for Starbucks. The global coffee leader has shuttered over 600 stores worldwide this year and cut around 900 corporate jobs. In the U.S., dozens of unionized Starbucks locations went on strike, prompting calls for a boycott from figures like New York City mayor-elect Zohran Mamdani. Additionally, Starbucks recently agreed to sell up to 60 percent of its China operations to a private equity firm, signaling a period of strategic adjustment.
Among the Chinese brands, Luckin Coffee stands out for its rapid U.S. growth, having opened five Manhattan locations this year alone. As China’s largest coffee chain, Luckin operates more than 26,000 stores globally and outnumbers Starbucks in its home market by roughly three to one. Founded less than ten years ago by a former technology executive, the company is known for its streamlined, app-driven store model.
During a visit to a Luckin café in New York’s Financial District, one of our reporters ordered a regular iced coconut latte, which came to $7.02 after tax. What stood out was the quiet atmosphere, despite it being 4 p.m. on a Tuesday, only about four customers were present. The silence, however, was largely due to the store’s operational design. Luckin requires all orders to be placed online, eliminating the need for verbal interaction between customers and staff.
A computer monitor alerted baristas to incoming orders and automatically printed labels for each drink. The only time an employee spoke was when our reporter and another customer seemed unsure of what to do. “Is it your first time here?” the staff member asked. “We do everything online. You can scan the code to order.” When the drink was prepared, it was placed on the counter without any announcement, leaving our reporter to identify his order independently.
A follow-up visit to a Luckin store in Midtown revealed a busier scene. This time, our reporter downloaded the Luckin app, which offers a first-time user discount, a $1.99 drink, an exceptional value in New York. He ordered a cold brew, and once again, the baristas remained silent when it was ready, reinforcing the brand’s emphasis on a seamless, tech-focused customer journey.
![Image: A modern Luckin Coffee store interior with digital ordering kiosks and baristas preparing drinks.]
(Source: Wired)
