Why Luckin Coffee Is Considered Starbucks' Biggest Competitor

When it comes to popular coffee brands in America, Starbucks is often seen as reigning supreme. This is for good reason: The chain has more than 16,000 stores and makes over $31 billion annually, based on 2023 data from Statista (via Toast). This far exceeds its competitors, as the second most popular coffee chain in the United States, Dunkin', has less than 10,000 stores and makes closer to $12 billion annually. It seems like no one can stand up to the industry titan that is Starbucks, but one brand is trying: Luckin Coffee, a China-based coffee shop chain.

Luckin Coffee has been around since 2017, though the chain was exclusively found in Asia until very recently. It opened its first U.S. locations in New York City in June of 2025, a significant step since its 2019 attempt to enter the U.S. market was rejected due to financial scandal. However, after Luckin's revenue in China outperformed Starbucks' in 2023 (and had an 8% edge on year-over-year increase in China last year), the chain seemed prepared to make another attempt.

While it remains to be seen whether Luckin will perform as well in America as it does in China, its entry into the U.S. market certainly has the potential to shake up the coffee industry. After all, Starbucks is no longer China's largest coffee chain. Luckin is known for its low prices, with Starbucks beverages in China costing about 30% more than Luckin's. This will likely be a significant factor in its U.S. performance.

While Starbucks has had a mobile app for a long time, many of its sales are still done at the counter. In contrast, Luckin Coffee exclusively handles ordering through its app, cutting down overhead by eliminating the need for a cashier. While Starbucks is known for its cafe ambiance, Luckin locations are meant to be entered and exited quickly, which means the stores aren't as concerned with seating and decor. Rather, it is tech and convenience-based and offers unique flavors, such as its Moutai Liquor Latte, which naturally draws in a young audience. This may be why one of its stores is located near New York University; the location draws in its target customers.

The two U.S. Luckin Coffee locations are, as of the time of this writing, offering first-time customers a drink for just $1.99 to draw them in. Even without this deal, though, the chain's drinks are cheaper. A drip coffee is $3.45, slightly cheaper than the $3.65 a New York City Starbucks location charges. In addition, its signature Iced Coconut Latte seems to be $6.45, once again slightly cheaper than the $6.75 that a Starbucks Vanilla Latte costs in New York City. While these numbers aren't drastically different, they can add up for customers who order coffee daily; saving $0.30 per day adds up to $9 a month, or about $108 a year. This means Starbucks may have to consider altering its pricing or otherwise set itself apart if Luckin continues to expand.