China’s Coffee Giants Expand to the U.S. with Manhattan Launch: Can Luckin and Cotti Compete with Starbucks?

Summary: Luckin Coffee and Cotti Coffee — two of China’s fastest-growing coffee chains — are entering the U.S. market, starting with stores in Manhattan and Brooklyn. As they challenge established brands like Starbucks, analysts weigh in on whether their low-price, high-tech strategy can succeed in the world’s most competitive coffee market.

Why Are Chinese Coffee Chains Expanding to the U.S.?

China’s leading coffee brands, Luckin Coffee and Cotti Coffee, are launching in the U.S. as part of an aggressive international expansion strategy. Luckin will open its first American branch in Lower Manhattan, while Cotti has already launched outlets in Brooklyn and Manhattan.

This move is driven by saturation and fierce competition in the Chinese market, prompting these brands to explore overseas growth opportunities — particularly in urban U.S. centers.

“New York is culturally the best testing ground for a Chinese brand expanding internationally,” said Danilo Gargiulo, Senior Analyst at Bernstein.

Can Luckin Coffee Succeed in the U.S.?

1. Brand Background

Luckin Coffee is China’s largest coffee chain, with more than twice as many outlets as Starbucks in the country. It regained public trust after a 2020 Nasdaq delisting due to accounting fraud, thanks to steep discounts and viral product innovation.

2. Innovative Products

Luckin is known for its alcohol-infused latte with Moutai, which sold 5.4 million cups on launch day and generated over $13.7 million in sales. In 2024 alone, the brand launched 119 new menu items, blending coffee with flavors inspired by Chinese cuisine and bubble tea.

3. Technology-Driven Operations

In China, Luckin operates with a tech-first model, allowing customers to order and receive delivery via WeChat, streamlining the process and reducing the need for large storefronts. The company also owns roasting and supply chain operations to lower costs.

What Is Cotti Coffee and How Is It Competing?

Cotti Coffee was launched in 2022 by former Luckin executives. It has quickly expanded across Southeast Asia, the Middle East (including Dubai), and the U.S..

In New York, Cotti offers $0.99 drinks for first-time customers using its app, reflecting the same aggressive pricing strategy that fueled its domestic growth.

What Challenges Do Luckin and Cotti Face in the U.S.?

• High labor and operational costs in cities like New York

• Tariffs on Chinese businesses that may impact supply chain savings

• Need for local payment methods and customization

• Consumer perception of Chinese brands, particularly among older generations

“There’s a long list of things that could potentially drive the price up,” said Allison Malmsten, China Strategy Director at Daxue Consulting.

How Do These Chains Compare to Starbucks in the U.S.?

• Pricing: Luckin and Cotti are expected to remain cheaper than Starbucks, but not as dramatically as in China.

• Experience: Instead of traditional coffeehouse ambiance, the Chinese chains emphasize convenience, speed, and value.

• Product Offerings: They bring innovative, culturally specific flavors that may appeal to Gen Z and younger millennial audiences.

Starbucks recently responded by cutting drink prices in China by an average of $0.70, signaling how seriously it takes the growing competition.

Will Chinese Coffee Brands Thrive in the U.S. Market?

The success of HeyTea, a Chinese bubble tea brand that entered the U.S. in 2023 and expanded to Boston, Seattle, and LA, indicates potential demand for innovative Asian beverage brands. However, analysts caution that success depends on whether Luckin and Cotti can become part of Americans’ daily routines, rather than being seen as novelty or tourist stops.

“If it’s just an exotic experience, it won’t integrate into the daily coffee habit,” Gargiulo noted.

Key Takeaways

• Luckin Coffee is opening its first U.S. store in Lower Manhattan.

• Cotti Coffee has already launched in Manhattan and Brooklyn.

• Both brands offer tech-enabled service and unique flavors at lower prices.

• Challenges include high U.S. costs, tariffs, and brand perception.

• Success depends on long-term consumer adoption, not just curiosity.