Latest news with #GuoJinyi
Yahoo
05-07-2025
- Business
- Yahoo
Is a Chinese chain's blood orange cold brew the future of coffee in America?
Chinese chain Luckin Coffee opened its first two U.S. locations this week, betting that mobile-only ordering and creative flavors can lure customers away from Starbucks. Both new Luckin stores are based in Manhattan, and at the midtown location on Wednesday, Sam Liu took a sip of her jasmine cold brew. 'I've never tried anything like it,' she said. Liu said she'd hoped for more seating — the small shop has only three tables — and was initially confused by Luckin's in-app ordering system, which means customers can't order directly from a barista. 'I thought I just order at the counter, but I realized everyone was standing around looking at their phone,' Liu said. Luckin is China's largest coffee chain, with more than twice as many locations as Starbucks there. Its two New York City stores are its first foray outside Asia, where it has over 24,000 locations across the region. By comparison, there are over 17,000 Starbucks in the United States. Its CEO, Guo Jinyi, called the U.S. 'a strategically important market' for the company's expansion in a press release heralding the two new locations Wednesday. 'We are excited to introduce a diverse and unique coffee experience to American consumers.' The company, which didn't respond to a request for comment, has touted its ambitions to expand globally but hasn't publicly detailed its next moves in the U.S. or other markets. The chain has gained success overseas through creative drinks like alcohol-infused coffees and fruit lattes, along with its smartphone-centric ordering model. The app-based approach makes it easier to track inventory, send personalized appeals to consumers and serve drinks quickly, said John Zolidis, an analyst who tracks Luckin and Starbucks at the brokerage firm he founded, Quo Vadis Capital. 'Luckin was able to develop an incredible muscle with regard to product innovation, and they have been very creative in China,' he said. Zolidis said how Luckin fares on Starbucks' home turf will depend on its ability to differentiate its menu from other major U.S. coffee chains and smaller, independent cafes. Its American lineup already includes distinctive drinks like blood orange cold brew and coconut lattes. 'These orange drinks, or one of their most successful, a coconut cloud latte — that's how you get trial [customers] from the U.S.,' Zolidis said. Luckin faced financial troubles during the pandemic. It was delisted from Nasdaq in 2020 after its stock plunged following an internal investigation that found an executive had falsified revenue reports. The company filed for bankruptcy in the U.S. the following year but emerged from proceedings in 2022 and its sales have soared since, reaching $4.7 billion worldwide in fiscal year 2024, a 38.4% increase from 2023. Starbucks, by contrast, is struggling in both the U.S. and China. Its same-store sales in the U.S. declined 2% and its sales in China 8% in fiscal year 2024, and it reported in April that its quarterly profit was half of what it pulled in for the same period last year. The Seattle-based chain is reportedly looking to partially sell its business in China while revamping its U.S. strategy to focus on customer experience and human connection, in contrast with Luckin's model. 'We veered away from, I think, owning the idea of the 'third place,' the coffeehouse experience, making sure that the customer was front and center,' Starbucks CEO Brian Niccol told NBC News in June. A Starbucks spokesperson declined to comment. Zolidis said that whereas Starbucks aims in both the U.S. and China to appeal to customers looking for higher-end coffee served in an inviting setting, Luckin has successfully positioned itself as the 'everyman's coffee' in China, with low prices and small, grab-and-go storefronts. After taking the train in from Hoboken, New Jersey, to check out the new one in midtown, Samantha Coy said the trip was worth it. She had enjoyed Luckin in China previously and was eager to order one of its fruit drinks. 'I'm surprised Starbucks hasn't tried to bring that over to the U.S.,' Coy said. 'I hope they stay open.' Zolidis said he thinks Luckin is well-positioned to gain a foothold in America. 'They've been able to operate and grow incredibly quickly in the Chinese market, much faster than I would have thought possible, and they've been able to sustain it and develop a strong financial model so they can fund their expansion in the U.S.,' Zolidis said. 'They wouldn't be coming here to try it if they didn't think they had a shot of owning part of the market.' This article was originally published on
Yahoo
05-07-2025
- Business
- Yahoo
Is a Chinese chain's blood orange cold brew the future of coffee in America?
Chinese chain Luckin Coffee opened its first two U.S. locations this week, betting that mobile-only ordering and creative flavors can lure customers away from Starbucks. Both new Luckin stores are based in Manhattan, and at the midtown location on Wednesday, Sam Liu took a sip of her jasmine cold brew. 'I've never tried anything like it,' she said. Liu said she'd hoped for more seating — the small shop has only three tables — and was initially confused by Luckin's in-app ordering system, which means customers can't order directly from a barista. 'I thought I just order at the counter, but I realized everyone was standing around looking at their phone,' Liu said. Luckin is China's largest coffee chain, with more than twice as many locations as Starbucks there. Its two New York City stores are its first foray outside Asia, where it has over 24,000 locations across the region. By comparison, there are over 17,000 Starbucks in the United States. Its CEO, Guo Jinyi, called the U.S. 'a strategically important market' for the company's expansion in a press release heralding the two new locations Wednesday. 'We are excited to introduce a diverse and unique coffee experience to American consumers.' The company, which didn't respond to a request for comment, has touted its ambitions to expand globally but hasn't publicly detailed its next moves in the U.S. or other markets. The chain has gained success overseas through creative drinks like alcohol-infused coffees and fruit lattes, along with its smartphone-centric ordering model. The app-based approach makes it easier to track inventory, send personalized appeals to consumers and serve drinks quickly, said John Zolidis, an analyst who tracks Luckin and Starbucks at the brokerage firm he founded, Quo Vadis Capital. 'Luckin was able to develop an incredible muscle with regard to product innovation, and they have been very creative in China,' he said. Zolidis said how Luckin fares on Starbucks' home turf will depend on its ability to differentiate its menu from other major U.S. coffee chains and smaller, independent cafes. Its American lineup already includes distinctive drinks like blood orange cold brew and coconut lattes. 'These orange drinks, or one of their most successful, a coconut cloud latte — that's how you get trial [customers] from the U.S.,' Zolidis said. Luckin faced financial troubles during the pandemic. It was delisted from Nasdaq in 2020 after its stock plunged following an internal investigation that found an executive had falsified revenue reports. The company filed for bankruptcy in the U.S. the following year but emerged from proceedings in 2022 and its sales have soared since, reaching $4.7 billion worldwide in fiscal year 2024, a 38.4% increase from 2023. Starbucks, by contrast, is struggling in both the U.S. and China. Its same-store sales in the U.S. declined 2% and its sales in China 8% in fiscal year 2024, and it reported in April that its quarterly profit was half of what it pulled in for the same period last year. The Seattle-based chain is reportedly looking to partially sell its business in China while revamping its U.S. strategy to focus on customer experience and human connection, in contrast with Luckin's model. 'We veered away from, I think, owning the idea of the 'third place,' the coffeehouse experience, making sure that the customer was front and center,' Starbucks CEO Brian Niccol told NBC News in June. A Starbucks spokesperson declined to comment. Zolidis said that whereas Starbucks aims in both the U.S. and China to appeal to customers looking for higher-end coffee served in an inviting setting, Luckin has successfully positioned itself as the 'everyman's coffee' in China, with low prices and small, grab-and-go storefronts. After taking the train in from Hoboken, New Jersey, to check out the new one in midtown, Samantha Coy said the trip was worth it. She had enjoyed Luckin in China previously and was eager to order one of its fruit drinks. 'I'm surprised Starbucks hasn't tried to bring that over to the U.S.,' Coy said. 'I hope they stay open.' Zolidis said he thinks Luckin is well-positioned to gain a foothold in America. 'They've been able to operate and grow incredibly quickly in the Chinese market, much faster than I would have thought possible, and they've been able to sustain it and develop a strong financial model so they can fund their expansion in the U.S.,' Zolidis said. 'They wouldn't be coming here to try it if they didn't think they had a shot of owning part of the market.' This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
NBC News
10-06-2025
- Business
- NBC News
China's homegrown coffee giants are brewing up a U.S. expansion
Chinese beverage chains are redefining coffee culture in the country — and now they're trying to win over customers in the U.S. and beyond. Luckin Coffee, China's largest coffee chain, has expanded aggressively in China and overtaken Starbucks on the mainland, with more than twice as many outlets. Following an accounting fraud scandal that got the company delisted from the Nasdaq in 2020, Luckin has staged an unlikely comeback with quirky flavors and steep discounts — as low as $1.40 per cup during an earlier price war with rival Cotti Coffee. The Wall Street debacle hasn't dampened Luckin's ambitions in the U.S., where it still trades over the counter. After venturing into Singapore, Hong Kong and Malaysia, Luckin is set to take its biggest leap yet with plans to open a branch in Lower Manhattan. The move mirrors Cotti's, which just opened outlets in Brooklyn and Manhattan. Founded in 2022 by former Luckin executives who were ousted over the scandal, Cotti has also grown rapidly in China and internationally, with stores in locations ranging from Southeast Asia to Dubai and California. 'New York is probably culturally the best testing ground for an international brand to expand into, especially a Chinese one,' said Bernstein Senior Analyst Danilo Gargiulo, citing the city's diversity and large base of young consumers. 'But it's also the most saturated, one of the most competitive markets.' Chinese chains combine budget pricing with unusual flavors that often blur the line between coffee and bubble tea — jarring to purists but extremely popular at home. Luckin said its alcohol-infused latte, developed with China's leading Moutai liquor maker, sold more than 5.4 million cups on its first day in 2023, generating over $13.7 million in sales. The company launched 119 different items in 2024 alone. Luckin has built its business around technology, allowing customers in China to order and get deliveries through the country's ubiquitous WeChat app, replacing the traditional cafe experience with hyper efficiency. The company also runs large coffee-bean roasting and processing operations in China to help drive down costs. The question is whether this will work in America. Luckin and Cotti did not respond to requests for comment from CNBC. On an earnings call in April, Luckin's co-founder Guo Jinyi said the company plans to 'adopt flexible, locally tailored models' to steadily expand overseas. Slowing growth and intense competition in China has pushed companies to seek opportunities beyond its borders. Coffee price wars From electric car makers to food delivery platforms, large-scale Chinese companies often follow a familiar strategy: burn cash, grab market share, worry about profit later. This helps them grow fast, but can infuriate global competitors. In the latest sign of increasing competition in China, Starbucks on Monday said it will lower the prices of dozens of drinks in the country by an average of $0.70 this summer. In New York, Cotti is selling drinks for 99 cents to first-time customers who download its app. Over time, analysts estimate that Luckin and Cotti will still be cheaper than Starbucks in the U.S., but the gap will be narrower than it is in China. Manhattan may share major Chinese cities' love for efficiency, but businesses there face New York wages and may need to accept additional payment options, adding to costs, said Allison Malmsten, China strategy director at Daxue Consulting. Tariffs on Chinese businesses may further erode their supply-chain advantages, she added. 'There's a long list of things that could potentially drive the price up,' Malmsten said. If Luckin's New York debut proves successful, the company could venture further afield. HeyTea — a Chinese chain known for topping its teas with foamy cream cheese — landed in New York in late 2023 and has since spread to Boston, Seattle and Los Angeles. Despite tensions between Washington and Beijing, Gen Z and younger Americans tend to perceive China differently than older generations, who may associate Chinese products with lower quality, according to Malmsten. Bargain coffee from Chinese chains could also appeal to New Yorkers facing rising costs on everything from groceries to coffee beans. Still, coffee shops that run on thinner margins need volume, analysts say. This means appealing to a wider range of customers. 'If it's perceived as being only a touristy or exotic adventure, then it's not going to become part of your day-to-day consumption, it's not going to become part of your morning routine,' Bernstein's Gargiulo said.
CNBC
09-06-2025
- Business
- CNBC
China's homegrown coffee giants are brewing up a U.S. expansion
Chinese beverage chains are redefining coffee culture in the country — and now they're trying to win over customers in the U.S. and beyond. Luckin Coffee, China's largest coffee chain, has expanded aggressively in China and overtaken Starbucks on the mainland, with more than twice as many outlets. Following an accounting fraud scandal that got the company delisted from the Nasdaq in 2020, Luckin has staged an unlikely comeback with quirky flavors and steep discounts — as low as $1.40 per cup during an earlier price war with rival Cotti Coffee. The Wall Street debacle hasn't dampened Luckin's ambitions in the U.S., where it still trades over the counter. After venturing into Singapore, Hong Kong and Malaysia, Luckin is set to take its biggest leap yet with plans to open a branch in lower Manhattan. The move mirrors Cotti's, which just opened outlets in Brooklyn and Manhattan. Founded in 2022 by former Luckin executives who were ousted over the scandal, Cotti has also grown rapidly in China and internationally, with stores in locations ranging from Southeast Asia to Dubai and California. "New York is probably culturally the best testing ground for an international brand to expand into, especially a Chinese one," said Bernstein Senior Analyst Danilo Gargiulo, citing the city's diversity and large base of young consumers. "But it's also the most saturated, one of the most competitive markets." Chinese chains combine budget pricing with unusual flavors that often blur the line between coffee and bubble tea — jarring to purists but extremely popular at home. Luckin said its alcohol-infused latte, developed with China's leading Moutai liquor maker, sold more than 5.4 million cups on its first day in 2023, generating over $13.7 million in sales. The company launched 119 different items in 2024 alone. Luckin has built its business around technology, allowing customers in China to order and get deliveries through the country's ubiquitous WeChat app, replacing the traditional cafe experience with hyper efficiency. The company also runs large coffee-bean roasting and processing operations in China to help drive down costs. The question is whether this will work in America. Luckin and Cotti did not respond to requests for comment from CNBC. On an earnings call in April, Luckin's co-founder Guo Jinyi said the company plans to "adopt flexible, locally tailored models" to steadily expand overseas. Slowing growth and intense competition in China has pushed companies to seek opportunities beyond its borders. From electric car makers to food delivery platforms, large-scale Chinese companies often follow a familiar strategy: burn cash, grab market share, worry about profit later. This helps them grow fast, but can infuriate global competitors. In the latest sign of increasing competition in China, Starbucks on Monday said it will lower the prices of dozens of drinks in the country by an average of $0.70 this summer. In New York, Cotti is selling drinks for 99 cents to first-time customers who download its app. Over time, analysts estimate that Luckin and Cotti will still be cheaper than Starbucks in the U.S., but the gap will be narrower than it is in China. Manhattan may share major Chinese cities' love for efficiency, but businesses there face New York wages and may need to accept additional payment options, adding to costs, said Allison Malmsten, China strategy director at Daxue Consulting. Tariffs on Chinese businesses may further erode their supply-chain advantages, she added. "There's a long list of things that could potentially drive the price up," Malmsten said. If Luckin's New York debut proves successful, the company could venture further afield. HeyTea — a Chinese chain known for topping its teas with foamy cream cheese — landed in New York in late 2023 and has since spread to Boston, Seattle and Los Angeles. Despite tensions between Washington and Beijing, Gen Z and younger Americans tend to perceive China differently to older generations, who may associate Chinese products with lower quality, according to Malmsten. Bargain coffee from Chinese chains could also appeal to New Yorkers facing rising costs on everything from groceries to coffee beans. Still, coffee shops that run on thinner margins need volume, analysts say. This means appealing to a wider range of customers. "If it's perceived as being only a touristy or exotic adventure, then it's not going to become part of your day-to-day consumption, it's not going to become part of your morning routine," Bernstein's Gargiulo said.
