As Luckin expands globally, can China’s coffee brand succeed where its soft power has struggled?

Beijing: China may be synonymous with tea. But coffee is the global hipster's brew of choice - and Chinese cities are teeming with this demographic. Coffee shops are now standard urban accoutrement. Consumption has grown at more than 20% annually since 2010, compared with a global average of under 2%.

High priests of the Kingdom of Caffeine in the Sinosphere are Starbucks, an early mover that entered China in 1999, and its domestic challenger, Luckin, the coffee goliath you've likely never heard of.

I remember being bemused by the incongruity of finding a Starbucks cafe inside Beijing's historic Forbidden City in 2002. The symbolism of a US franchise planting its flag inside hallowed imperial Chinese ground was not lost on the Chinese either. Following online protests, the outlet closed in 2007.

For decades, coffee in China spoke in multiple tongues: reform and opening up, US soft power, urban aspiration, and a growing middle class. Gradually, that idiom has changed - to one of cultural pride, local brands, and a pre-eminent China. Starbucks is giving way to Luckin as the caffeine-speaking mouthpiece du jour.

Founded in 2017, Luckin has dwarfed Starbucks on the mainland. In 2025, its net revenue reached RMB 49.29 bn (about $7.18 bn), up 43% y-o-y. It now operates more than 35,000 stores worldwide, mostly in China, compared with roughly 8,000 Starbucks outlets on the mainland.

Starbucks' China market share, meanwhile, fell from 34% in 2019 to 14% in 2024.

Luckin is a juggernaut. Its retail model is built around efficiency and cost-cutting: order by phone, collect with minimal waiting, and choose from whimsical flavours, and constantly rotating discounts delivered through a game-like app. It is also cheap. Standard coffees cost roughly RMB 10-20 ($1.40-2.75), often less than half the price of a comparable Starbucks drink.

To the non-Chinese palate, some offerings are improbable. I tried Pineapple Cold Brew. Thank you, but, no. Big Cheese Latte proved a bridge too far to even attempt. Yet, China has embraced the combination of coffee, tea and other local flavours. Luckin's appeal is precisely that it does not try to be Starbucks. That distinction matters beyond coffee.

China is already a great power contender, leading the world in manufacturing capacity, green-energy production and AI. Its military strength is backed by huge defence budgets, and cyber capabilities. Yet, when it comes to soft power - the ability to be admired, emulated and desired - Beijing has been less successful.

Japan has cherry blossoms and anime; South Korea has K-pop and Korean dramas; India has Bollywood and yoga. The US' influence over the past half-century has owed something to brands such as Levi's, McDonald's and Starbucks. as much as to its political and military heft. If people want to wear American jeans and drink American coffee, the US is doing something right. In other words, soft power is partly about being the popular kid. And for all its hard power prowess, China has struggled to join the 'it' crowd.

Part of the problem is digital decoupling. Over two decades, China has built a Great Firewall separating its cybersphere from the global information commons while nurturing national champions. Google, WhatsApp, Facebook and Netflix are inaccessible inside China without a VPN. Chinese consumers inhabit a different digital ecosystem: Taobao rather than Amazon, Didi rather than Uber, WeChat rather than WhatsApp, Baidu rather than Google.

That separation also limits organic people-to-people contact through which soft power develops. Government-backed initiatives such as Confucius Institutes, mandated to disseminate Chinese language and culture abroad, can look less like cultural exchange than state messaging.

No one would have ever felt cool drinking a Frappuccino if they believed it had been mandated by the US State Department.

But there's a twist. This year, Starbucks effectively ceded control of its China business, selling 60% of its roughly 8,000 mainland stores to Chinese PE firm Boyu Capital while retaining a 40% stake and licensing fees. The partners aim eventually to expand to 20,000 outlets, with growth dependent on 'hyper-localisation'.

Meanwhile, Luckin is stepping outside the Sinosphere. After opening stores in Singapore and Malaysia, it entered the US in 2025 with two New York outlets. A year later, it had expanded to around 20 locations, including Grand Central Terminal. Could Luckin succeed where China's official soft power efforts have struggled?

The irony is that Luckin's appeal is not particularly Chinese in any overt ideological sense. Its pitch is convenience, speed, low prices, novelty and digital efficiency - the same characteristics that have powered China's economic rise. It doesn't ask consumers to admire China. It simply asks them to download an app and buy a coffee.

Starbucks, by contrast, is increasingly selling the experience of being somewhere. Its 'third place' model is built around couches, conversation and lingering. Luckin largely dispenses with human interaction: order on your phone, collect your drink, get on with your day. These are competing visions of the future, not merely competing coffee chains.

Will consumers ultimately prefer efficiency, or experience? Convenience, or community? Algorithmic personalisation, or the social ritual of a shared physical space? And could a Chinese brand become globally aspirational without explicitly trying to export Chinese culture?

The writer is a Beijing-based columnist