China 101
Luckin Coffee
瑞幸咖啡
The app-first coffee chain that overtook Starbucks in China by store count with cheap coconut lattes, infamous for a 2020 accounting scandal and then a remarkable comeback.
Luckin Coffee was founded in 2017 to take on Starbucks with a different model: no seating-focused third place, just small pickup stores, app-only ordering, constant coupons, and lattes at half Starbucks' price. It listed on Nasdaq within 18 months, then imploded in 2020 when it admitted to fabricating sales, was delisted, and paid massive fines.
The comeback is why Luckin matters now. Under new management it kept expanding, perfected a pipeline of viral drinks like the raw coconut latte, and partnered with Moutai liquor for a baijiu-flavored latte that sold millions of cups in a day. By store count it passed 20,000 locations in China, far beyond Starbucks, and began expanding overseas.
Luckin's story is told in Chinese business circles as a case study in both fraud and operational brilliance: scandal notwithstanding, its low-price, high-frequency model fundamentally changed how urban China drinks coffee.