ee grew faster than any coffee chain in China by stripping down the cafe experience to its essentials. It leapfrogged traditional store models, built out a massive app-based ecosystem, and rapidly opened locations in high-traffic areas. That strategy, paired with prices roughly 30 per cent cheaper than Starbucks, allowed Luckin Coffee to surpass the US coffee giant in number of stores across China by 2019. But the triumph was short-lived. In 2020, the company admitted to inflating its sales by more than US$300 million, leading to a $180 million SEC fine, leadership shake-ups and delisting from the Nasdaq. For many companies, this would have been the end. But under new leadership, Luckin Coffee doubled down on its tech-first, discount-heavy strategy, eventually regaining consumer trust. In 2023, it did what once seemed unthinkable: Surpassing Starbucks in total revenue within China. The brand now has more than 22,000 locations across China, Singapore, Malaysia and Hong Kong. Oversaturated market  Whether it can break through the Western market is another question entirely. “There is never a best time to enter a new market, let alone the US,” said Lee Kok How, managing partner at Aora Group and lecturer at Singapore Management University.  Competitors like Dutch Bros and Peet’s are already battling for share, while Starbucks is also trying to maintain its position in its home market. According to Statista, the US coffee market is expected to reach approximately US$91 billion this year, with a projected CAGR of 5.8 per cent between 2025 and 2034.  “When it comes to coffee shops, the US market is pretty saturated. It is also under pressure as some consumers are curtailing spending on beverages. So Luckin Coffee is not entering at the best of times,” said Neil Saunders, managing director, retail at GlobalData.  “However, its calculation will be that it can do something different from incumbents, especially Starbucks, and that it can win market share. Whether this judgement is right remains to be seen.” For its New York launch, all drinks are priced at $1.99, an aggressive hook in an inflation-weary market. Even post-promotion, its pricing strategy is undercutting. A regular iced latte at Luckin Coffee is $5.75, a few cents cheaper than Starbucks, but more importantly, it’s frequently discounted through coupons and membership schemes. “Inflation in the US, exacerbated by tariffs, has affected disposable income, leading to tightening wallets. A cheaper and possibly tastier alternative for an almost daily spend to some will definitely be welcomed,” Lee said.  The stores offer a menu that includes traditional espresso drinks and a selection of signature beverages. The cafe features a variety of pastries and breakfast items, including banana yogurt loaf, chocolate chip cookies and sausage, egg, and cheese croissants. The company’s chairman and CEO, Guo Jinyi, said it will “bring more diverse coffee options and fresh consumer experiences to the US”. Now, flush with confidence and lessons learned, the company is looking outward with the US at the top of its list. Can Luckin Coffee win the long game? Luckin Coffee’s expansion into the US comes on the heels of a broader cultural shift: Chinese brands, long absent from the American mainstream, are becoming cool. The past year has seen a surge of interest in Chinese beverage culture in the US, driven by brands, including Chagee, Mixue Bingcheng and Heytea, all of which have opened US stores to enthusiastic reception. Even non-beverage brands like Popmart and Miniso have seen an uptick in popularity.  “The recent successful Nasdaq IPOs by China beverages Mixue and Chagee have drummed up substantial interest in Chinese beverage brands,” Lee said.  “The easing of travel restrictions for foreigners by China in the past year has also resulted in a wealth of social media content covering China travels, food and brands,” he added. “This has definitely helped to stimulate interest.” Mixue and Chagee’s IPO debuts have further raised the profile of Chinese beverage players, fuelling investor confidence and consumer curiosity alike. In this context, Luckin Coffee’s entry seems less risky and more culturally attuned. Of course, expansion won’t be easy. Despite the increasing acceptance of Chinese brands in the US market, this favourable reception alone does not ensure commercial viability. “Luckin Coffee’s two ace cards come from speed and price,” said Saunders. “Its model is geared around convenience, including the extensive use of technology and offering reasonably low prices. “Consumers will likely be receptive to this, although Luckin Coffee will need to shift habits to get people to give them a try. I also think menu innovation will be important as a lot of younger consumers are very experimental when it comes to beverages.”