Starbucks opened its doors the first store in China in 1999, when drinking coffee in a Western-style cafe was still a novel idea for many locals. However, over the years, domestic coffee and bubble tea brands such as Luckin Coffee, Heytea, Chagee and Mixue have gradually reduced Starbucks’ market share in China. Now they’re sailing across the Pacific, hoping to compete with the Seattle coffee giant and other U.S. beverage chains on home turf.
We wanted to experience and taste what these Chinese brands offer to American consumers. Last week we visited two Luckin cafes and one HeyTea store in Recent York, as well as one Chagee location in Los Angeles. We discovered that a modern, different beverage culture was emerging, built around speed, smartphone apps and premium flavors.
The emergence of Chinese chains comes at a arduous time for Starbucks. This year, the company closed more than 600 stores around the world and laid off about 900 employees. Recent York Mayor-elect Zohran Mamdani urged people to do just that on Thursday Boycott Starbucks when unionized baristas in dozens of locations in the US went on strike. Earlier this month, Starbucks made the announcement he agreed sell up to 60 percent of its China operations to a private equity firm.
Model based on Luckin’s first application
The Chinese beverage brand that appears to be the fastest growing in the U.S. is Luckin, which has opened five locations in Manhattan this year alone. Luckin is China’s largest coffee chain, with over 26,000 stores worldwide. In China, there are about three Luckin stores for every Starbucks store. The company was founded by a former technology executive less than a decade ago and is known for its chic, app-centric cafes.
Zeyi visited one of Luckin’s locations in Recent York’s Financial District, where he purchased a regular-sized iced coconut latte that cost $7.02 after taxes. He says he was struck by the silence – there were about four customers in the store at 4 p.m. on Tuesday. But the eerie silence had more to do with the staff’s behavior. Luckin requires customers to order online, so there’s no need to talk to a human.
The computer screen notified baristas when orders arrived and printed stickers that could be placed on each cup. The only customer interaction occurred when Zeyi and another person appeared confused at the counter. – Is this your first time here? asked the employee. “Here we do everything online. You can scan the code and place your order.” When Zeyi finished his drink, he says the baristas just left it on the counter and he had to find out which one was his.
The next day, Zeyi visited another Luckin location in Midtown, which he said was busier than the first store. This time he decided to download the Luckin app – modern customers who operate it can get their first drink for $1.99, which is a great deal in Recent York. Zeyi ordered a icy brew and once again the baristas said nothing when it was ready.