Luckin Coffee eyes US market with small-scale re-entry

​CHINA – Chinese coffee giant Luckin Coffee is preparing to enter the US market, marking a significant move following a US$180 million settlement with the Securities and Exchange Commission (SEC) over previous fraud charges.  

According to Financial Times (FT), the Xiamen-based coffee chain, which is China’s largest by revenue, plans to initiate a small-scale rollout in the United States as early as next year. 

Luckin Coffee’s re-entry comes nearly five years after revelations of inflated revenue reports led to investor lawsuits and its delisting from the main Nasdaq exchange.  

The company has since restructured, focusing on convenience, affordability, and rapid expansion within its home market.  

Luckin’s innovative approach—characterized by compact stores, kiosks, and a strong emphasis on mobile ordering and automation—helped it rise quickly in China, where it now operates over 20,000 stores as of July 2024.  

Last year, its revenue reached Rmb24.9 billion (US$3.5B), surpassing Starbucks in the region. 

“Luckin will target cities with large numbers of Chinese students and tourists such as New York. The company has been running advertisements during NBA games to build name recognition ahead of its planned launched,” said sources quoted by FT. 

By pricing its coffee affordably—around US$2 to US$3 per drink—Luckin aims to undercut established US coffee chains and attract budget-conscious consumers, according to sources familiar with the strategy. 

In entering the highly competitive US coffee market, Luckin faces established giants. Starbucks, with nearly 17,000 stores in the US alone, and Dunkin’, with over 9,500 locations, hold a substantial share.  

New York-listed Dutch Bros, with around 900 outlets, also recently expanded its drive-through model by 20 percent in the past year.  

The US Coffee Market size is estimated at US$28.06 billion in 2024 by Yahoo Finance, and is expected to reach US$33.64 billion by 2029, growing at a CAGR of 3.69% during the forecast period (2024-2029). 

In addition to its expansion plans, Luckin recently inaugurated the largest coffee roasting factory in China.  

Further reinforcing its commitment to growth, the company secured a substantial trade agreement with Brazil, the world’s largest coffee producer, valued at roughly US$500 million.  

This partnership is expected to boost Luckin’s coffee supply and enhance its competitive edge both in China and in the global market. 

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