On June 30, 2025, Luckin Coffee opened trial operations at two PICK UP quick pick-up stores in Manhattan, New York, USA. The Chinese Communist Party’s media outlet, Xinhua News Agency, praised it as a key move in Luckin Coffee’s global strategy.
However, Luckin’s strategies in the U.S. market are relatively low-key, with pricing similar to Starbucks and without the common practice of subsidy pricing used in China.
As of the end of the first quarter of 2025, Luckin Coffee had a total of 24,000 stores both domestically and globally, with sales exceeding 10.4 billion RMB. On July 30, Starbucks reported its third-quarter earnings, with a 4% increase in net income to $9.5 billion, adding 308 new stores and reaching a total of 41,000 stores worldwide.
In China, Starbucks faces a growing challenge from Luckin Coffee, with Starbucks having over 7,800 stores as of June 2025, while Luckin has a whopping 24,000 stores.
Facing intense price competition, there were rumors of Starbucks in China considering selling shares.
Luckin’s rapid expansion mainly relies on “price wars” and “delivery battles”. The strategy of price subsidies, dumping at low prices, and overwhelming the competition has become prevalent in many industries.
Speaking about the price war in the Chinese coffee market, one cannot ignore Luckin Coffee’s financial fraudulent events in the U.S.
Luckin Coffee, founded in October 2017, went public on the NASDAQ stock exchange on May 17, 2019, with an opening stock price surge of 19.88%, reaching a total market value of $4.74 billion.
On April 2, 2020, Luckin Coffee submitted documents to the U.S. Securities and Exchange Commission, reporting fraudulent transactions over the past year, falsely inflating revenues by about $2.2 billion. This led to an immediate 81.6% drop in Luckin Coffee’s stock price.
Luckin internally stated that its Chief Operating Officer, Liu Jian, and related employees colluded in fabricating data, leading to their suspension.
The two founders of Luckin Coffee, CEO Lu Zhengyao and COO Qian Zhiya, both came from the former Ucar Group, known for its rapid expansion of stores through capital investment, aggressive marketing, and willingness to operate at a loss.
After the scandal, Luckin Coffee transitioned to more traditional business models under the leadership of Guo Jinyin, focusing on consumer demands and product development, moving away from the heavy subsidy operation model.
Moreover, Lu Zhengyao, along with other former Luckin Coffee executives, started a new venture called Kudicoffee, adopting a similar low-price strategy in the Chinese coffee market.
Beyond the coffee industry, various sectors in mainland China are engaging in price wars due to a shrinking consumer demand situation, leading to international trade tensions.
The aggressive competition fueled by low prices lacks ethical practices, disregards environmental concerns, and undermines long-term sustainability.
Under the rule of the Chinese Communist Party, prioritizing short-term economic gains over legal regulations, public welfare, and sustainable development is prevalent, ultimately posing risks to China’s business sustainability in the long run.
For more information, please visit the following link: https://www.ganjingworld.com/zh-CN/live/1hra7qod4fh4gRopEUZRyw2iB14h1c.