We Visited a U.S. Outpost of China’s Luckin Coffee. Here’s What We Saw.

New Yorkers thirsting for a taste of China’s top coffee company are in luck.

Luckin Coffee, which has more than 24,000 shops in China, earlier this month opened its first two U.S. cafes in Manhattan. During a Tuesday morning visit to one, near New York University, customers said they were curious about both the company and a storefront they had watched take shape on their commutes.

“I did some research, and I saw, okay, this is the equivalent of Starbucks—the Chinese version,”  said Shazia Amin, 52, a Brooklyn resident. “So I do need to try it.”

Luckin went public in the U.S. in 2019. The chain’s momentum, however, came to a halt—and it was kicked off the Nasdaq—after an internal investigation determined executives had inflated its finances.

Now traded over-the-counter in the U.S., Luckin has regrouped. In addition to its Chinese stores, it has about 65 locations in other Asian countries, according to a company presentation, along with its New York City shops.

A Customer Experience That’s All About the Phone

Roughly a dozen people milled around the shop early Tuesday. The store played jazzy low-fi, but lacked the chatter characteristic of a city cafe: Most customers were focused on their phones, likely because orders must be placed via app. When an order is ready, customers scan a barcode on their phone and pick up items waiting on the counter. 

The app was a defining feature of Luckin from the get-go. Its founder, Jenny Quian, led a ride-hailing company and set out to apply that model to the coffee industry in 2017, according to The Wharton School at the University of Pennsylvania. With relatively light spending on headcount and real estate, Luckin surpassed Starbucks’ footprint in China within two years, Wharton found. 

Luckin’s app initially estimated that it would take six minutes to prepare the coconut latte and blood orange cold brew this reporter ordered. But a text message arrived after four minutes, announcing the beverages were ready.

Kalei Gregg, a 21-year-old NYU student, called the cashierless outpost “definitely different, but I kind of like it. It’s fast, convenient.” Gregg, who said she likes Luckin’s “really sweet” matcha tea, was visiting for a fifth straight day. 

Lawrence Aiello, 36, said he was worried that the app would collect data on him, but downloaded it when he saw that Luckin was offering discounted drinks. Aiello said he liked the “strong” cold brew, but would probably delete the app. “I have enough apps on my phone,” he said.  

A ‘Vital Kale’ Drink Will Run You $8

Luckin was giving customers their first drink for $1.99, though items typically cost a few dollars more. Prices range from $3.45 for a drip coffee–it was sold out by 10 a.m. when Investopedia visited–to $7.95 for a “vital kale” drink with fruit and jasmine. 

The menu includes familiar drinks, such as americanos, lattes, cappuccinos, cold brews, frappes, and a few dessert and breakfast foods. Some of Luckin’s most popular beverages, including coconut lattes and drinks with a velvet milk blend, may be new to many Americans.

Luckin–and other cafes with relatively low prices–have cut into Starbucks’ sales in China, Starbucks executives have said. Luckin had an 8.1% year-over-year increase in same-store sales at company-operated cafes in the quarter ended in late March, the company said. That quarter, Starbucks reported comparable store sales for company-run shops were flat compared to a year prior.

Starbucks CEO Brian Niccol has said that improving sales in China is less of a priority than reviving its American business. Starbucks has begun exploring the possibility of selling part of its Chinese business, and received a number of potential offers.