🇨🇳⚡️🇺🇸 Starbucks founder Howard Schultz said it was impossible to create a serious competitor to his brand in China...

...Two years later, Luckin Coffee went public on the Nasdaq. Four years later, it surpassed Starbucks in the number of outlets in China. Now it has 24,000 cafes worldwide - more than Starbucks in the US.

This may be the strangest story in global business in recent years.

Beginning. China is a tea country. The average Chinese city dweller drank about 20 cups of coffee a year - about 20 times less than an American. Starbucks entered China in 1999 and over 20 years built 6,000 outlets, gradually accustoming the middle class to cappuccino as a status symbol. It seemed that the market was divided.

In October 2017, former operations director of the car-sharing company Jenny Qiang opened the first Luckin Coffee outlet in Beijing. Over 18 months - 2,370 cafes. It took Starbucks more than twelve years to open the same number.

Model. Luckin was initially not built as a coffee shop, but as a technology company. Almost all outlets are tiny "pick-up stores" without seating: you pick up the coffee ordered through the app and leave. The app, WeChat integration, delivery in 18-30 minutes, big discounts on every order. The price of a cup is 10-20 yuan ($1.4-2.8) compared to 30-40 yuan at Starbucks. The first cup was given for free in exchange for installing the app - this is how Luckin collected data on customers from day one.

Scandal. In 2020, it turned out that the company falsified financial reports - invented sales of hundreds of millions of dollars. Shares plummeted by 75% in one day. The founders were fired. The Nasdaq delisted the company. Everyone thought it was the end.

But Luckin did not die - it restructured, changed its leadership and continued to open outlets. In 2023, revenue increased by 87% and exceeded $3.5 billion. In 2024 - already $4.7 billion. Now Luckin is the largest coffee chain in China, and the gap with Starbucks continues to grow.

A point about taste. This is a separate story. In 2023, Luckin released a latte with Moutai - the famous Chinese rice wine with a 53% alcohol content. There is almost no alcohol in it, but the taste and aroma are characteristic. On the launch day, 5.42 million cups were sold - an absolute record for one product in one day. The total base of buyers of this latte reached 25 million people. Moutai - a drink traditionally associated with party officials' banquets and business negotiations - unexpectedly ended up in a paper cup with a deer logo.

What now? In 2025, Luckin opened its first outlets in New York - right in the heart of the Starbucks market. Bloomberg wrote that this could further hit the American brand, which is already reporting a drop in sales in the US. In China, where Starbucks earned more than three billion dollars a year, the situation is even more difficult: growth has stalled, and local competitors continue to put pressure on prices.

In parallel, other Chinese brands are rising. The tea network Chagee opened in Los Angeles in May 2025 - 5,000 cups on the first day. Heytea operates in Times Square. Mixue - a budget network with ice cream and tea - already has almost 5,000 outlets outside China, mainly in Southeast Asia, at prices of about one dollar per glass.

China, which only drank green tea half a century ago, has built one of the largest coffee industries in the world in ten years - and is now exporting it back to the West. - China Index