cup starbucks coffee RTS16DFX Carlo Allegri

Starbucks’ comfortable control of the Chinese market is being challenged by a Beijing startup

$1 billion

Starbucks is doing pretty well in China: The Seattle coffee chain has over 3,300 stores in the country, and it operates with virtually no serious competition. But a Chinese startup could change that.

Published   |  Photo by Reuters/Carlo Allegri
cup starbucks coffee RTS16DFX Carlo Allegri
$1 billion

Launched just nine months ago, Beijing-based Luckin has already opened 525 outlets across China’s major cities. And after a $200 million funding round, the company is now valued at $1 billion.

cup starbucks coffee RTS16DFX Carlo Allegri
$1 billion

Luckin sells relatively cheaper beverages than Starbucks, invests aggressively in traditional advertising, and seems to be more tech-savvy than its American rival.

cup starbucks coffee RTS16DFX Carlo Allegri
$1 billion

It meshes Starbucks’ coffee-shop model with China’s “new retail” trend, in which tech giants like Alibaba and Tencent partner with stores on mobile payments, analytics, and inventory management.

cup starbucks coffee RTS16DFX Carlo Allegri
$1 billion

Luckin revolves around the smartphone. Inside the store, customers use its app to order coffee and can pay using its own digital wallet.

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