Luckin Coffee Opens Its First High-End Store in China

BEIJING — China’s Luckin Coffee is setting its sights directly on Starbucks‘ upscale roastery chain with the establishment of a new flagship store in southern China, which features premium beverages.

This marks a significant shift for Luckin Coffee, which initially focused on budget-friendly coffee kiosks—a strategy that enabled it to surpass Starbucks in the number of locations within China.

As Starbucks divests most of its struggling operations in China to a local investment firm, Luckin demonstrates its resilience following the fraud allegations that tarnished its reputation in 2020, leading to its Nasdaq delisting.

The newly inaugurated Luckin Coffee Origin Flagship is located in Shenzhen, near the Hong Kong border, and spans two floors.

In this flagship location, prices for drinks range slightly higher than the usual $1 or $2 for an Americano or latte, offering a variety of pour-over and cold brew options. Customers can select from beans sourced from Brazil, Ethiopia, or China’s Yunnan province, in line with the “origin” theme popular among other premium coffee brands.

The flagship also features unique beverages, such as a “tiramisu latte” topped with a pastry, as noted by users on the Chinese social media platform Xiaohongshu. Since its soft launch on January 20, people have reported waiting between one to three hours for these drinks.

Covering 420 square meters (4,521 square feet), the new store reflects the increasing competition Starbucks faces in China. In 2017, the American coffee giant chose Shanghai for its second Reserve Roastery, after introducing the concept in Seattle just three years prior.

As coffee culture flourishes in China, a traditionally tea-drinking nation, Starbucks now competes against numerous challengers, from artisanal cafes to chains such as Cotti Coffee and Manner, which frequently offer lower prices than Starbucks.

For the three-month period ending September 30, 2025, Luckin reported revenue of $1.55 billion, representing an impressive nearly 48% growth year-over-year.

This figure is derived from its self-operated locations, which make up more than half of Luckin’s establishments in China and most of its limited overseas outlets. The Shenzhen flagship is celebrated as Luckin’s 30,000th store, with a total of 29,214 stores globally reported as of September 30.

In contrast, Starbucks operates just over 8,000 locations in China and about 16,900 in the United States, its largest market.

The Seattle-based coffee chain reported a 6% increase year-over-year in China net revenue, reaching $831.6 million for the quarter ending September 28. Their comparable same-store sales, an industry benchmark, rose only 2%, but improved to 7% for the quarter ending December 28.

Starbucks has not disclosed its latest quarterly net revenue for China. The company is expected to finalize a deal in spring to transfer 60% of its China business to Boyu Capital while retaining a 40% interest. Upon announcement in November, Starbucks valued its Chinese operations at $13 billion, inclusive of anticipated licensing fees.

Luckin remains listed over-the-counter in the U.S. and had a market value of approximately $10.46 billion as of Thursday.

Last year, Luckin’s CEO Jinyi Guo hinted at potential plans to re-list the company in the U.S. though no specific timeline was provided. Founded in late 2017, the company achieved a $2.9 billion valuation within just 18 months and listed on the Nasdaq in May 2019. However, following the admission of substantial fraudulent sales one year later, Luckin faced delisting.

Throughout this period, the company continued to operate many stores while retaining its branding.

Moreover, Luckin has successfully engaged consumers through timely collaborations with premium brands such as Moutai, Minions cartoon characters, and the popular video game Black Myth: Wukong following its rise in popularity.

Analyst Mingchao Xiao of Zhimeng Trends Consulting notes that Luckin provides a unique user experience by directing traffic through its smartphone ordering app, allowing customers to select and pay for their drinks independently.

China’s coffee market is undergoing rapid transformation, Xiao observes, with young consumers increasingly eager to explore new experiences and seeking emotional gratification, which can be fulfilled through inter-industry collaborations.

In line with its growth strategy, Luckin is also expanding its international presence.

Last summer, the company opened its first stores in the United States, launching its 10th location in New York City on February 6.

Additionally, Luckin operates 68 stores in Singapore, having entered the market nearly three years ago, and it has 45 joint locations in Malaysia.