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02:20
US: China's biggest coffee chain looks to brew up business in US
Storyline: China's biggest coffee chain looks to brew up business in US [Voice_over] A battle is brewing between China's largest coffee chain, Luckin, and its chief US rival, Starbucks. In 2023, Luckin surpassed the Seattle-based java giant as the biggest coffee chain in China. Since then, the Xiamen-headquartered franchise opened stores in Malaysia and Singapore. Now it’s setting its sights on America. At the end of June, Luckin opened its first two ever US locations in New York. [Stand_up] Karina Mitchell, Reporter: "Now the newcomer to the US coffee scene has five stores in the city. The most recent opening here last month - in the heart of New York's financial district. And it's already finding fans." [Sound_bite] (Reporter: "What's your favorite?") Customer: "The coconut flavor in the coffee … yeah, I think that's the best." [Sound_bite] Customer: "It kind of reminds me of when you go into a Starbucks, but you're also getting the speediness and quickness of a Dunkin' so it's like the best of both worlds." [Voice_over] Luckin's business model appeals to younger demographics-including students on a budget and young professionals. In part, because of its app-only order platform … and cashierless stores. [Sound_bite] (Reporter: "What do you like about it ?") Customer: "I thought it had great flavor, and it was nice and easy to order" [Voice_over] And app users are regularly treated to steep discounts and promotions...So far proving to be as irresistible as the coffee. [Sound_bite] (Reporter: "What do you think about the pricing? ") Customer: "The pricing is really good … it's really hard to find something affordable, quick … especially in Lower Manhattan, so to have that for us everyday working people is great." (Reporter: "When you have the chance to go to Starbucks around the corner, or here, where do you prefer? ") "I would say Luckin coffee." [Voice_over] Its strategy - including opening smaller storefronts than Starbucks - seems to be paying off. 2025 second quarter results show Luckin had overall net revenue of more than us$1.7 billion. That's an almost fifty percent increase compared to a year ago. It comes at a time when its long-established rival, Starbucks - with more than 17-thousand stores in the US, is cutting prices in China and recently announced a $1 billion restructuring plan. That includes shrinking its global footprint, closing hundreds of stores nationally, and laying off about two thousand employees this year. Amid Starbucks' bitter choices, Luckin is betting its good fortune continues to percolate, expanding its global footprint to more than 24,000 stores. [Restrictions : No access Chinese mainland]
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