Shadowing Practice: How Chinese Luckin Is Taking On Starbucks In the U.S. - Learn English Speaking with YouTube
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China's largest coffee chain, is taking on the US.
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China's largest coffee chain, is taking on the US.
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At the beginning of September 2025, just two months since its launch, Luckin had opened five stores in New York City.
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The coffee giant has only been around since 2017, but it's become a dominant force in its domestic market with almost all of its 26,000 locations in China.
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For reference, Starbucks has just under 8000 in China and about 17,000 in the US.
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CNBC visited one of the first lock in locations in New York. It had a number on the coffee counter 00002.
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The zeros suggest that Luckin may be looking to scale its locations here into the thousands.
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But what challenges could Luckin face as it enters the US market, and what kind of threat could it pose to coffee chains like Starbucks?
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Luckin is a relatively young company, but has already experienced some major ups and downs.
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Founded in June 2017, within two years the company went public on the Nasdaq.
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Its initial growth was rapid and Wall Street was bullish on its future. From Q1 of 2018 to Q1 of 2019, Luckin's customer base soared from 485,000 people to 16.9 million.
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That's about 45,000 new customers per day.
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It's a volume game.
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At the end of the day, lacking is pointing to have the sales leverage come through the door.
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Minimize the cost of the real estate by having as many transactions as possible.
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And so be it. If the marginal profit on the marginal coffee is relatively small, they are trying to optimize for transactions.
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But only after 18 months as a publicly traded company.
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Luckin was charged with fraud by the SEC.
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In its preliminary IPO filing, the company noted that it is an emerging growth company, which meant it was eligible for reduced reporting requirements, Most notably, Luckin didn't need an auditor to attest to its internal management.
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In January 2020, short seller Muddy Waters Research shared an anonymous report that alleged fraudulent reporting of key business metrics to manipulate investor confidence.
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The report said it utilized 92 full time and over 1400 part time staff to run surveillance and record store traffic for 981 days in 620 stores.
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Luckin's stock price tanked in the wake of the report.
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In February 2020, the company issued a press release calling the short sellers report misleading and false. Investors and analysts also had doubts about its validity, and the stock rebounded.
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But by April, an internal investigation found the CEO had fabricated 2019 sales by $310 million.
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Shares fell over 80%, wiping out $5 billion off its market cap.
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It turns out the company was also reporting millions in profits when restated, filings show it was actually operating at a loss.
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Luckin was delisted from the Nasdaq in June 2020 and filed for bankruptcy less than a year later.
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But Luckin emerged from bankruptcy in 2022.
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It brought in new leadership and cleaned up its balance sheet over the next three years.
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It more than tripled its store count and quickly overtook Starbucks in China by total revenue.
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Despite a report from the Financial Times that Luckin was plotting its return to the Nasdaq, the company still trades on the OTC market, or over-the-counter market, a less regulated exchange.
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Its share price is up around 100% over the past year.
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Luckin relies entirely on mobile ordering.
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It cuts down the wait time in the stores and also reduces the amount of labor that it needs to operate.
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I see a coupon here for $1.99 on my first order.
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Luckin's full priced items aren't actually that far off from Starbucks, but the difference is you're rarely ever paying full price.
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The app showers you with coupons, so much so that it's actually unlikely its initial stores are even profitable right now.
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That is not how its competitor operates.
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Starbucks has always strived to be profitable on a single occasion. In the case of Luckin, the idea is I want to grow in awareness.
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I want to make sure that the brand gets recognized on a national basis, even though at the beginning this means that I might need to be suffering from some smaller losses on a per store basis.
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New York is an expensive place to operate a coffee shop. Equity research firm Bernstein analyzed its initial profitability.
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Rent for Luckin's Midtown location is around $15,000 per month, and labor costs are around 66,000 per month.
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Utilities, maintenance and insurance could cost another ten grand. That puts its overhead at around $92,000.
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In the report, published in late July 2025, less than a month after opening, the stores were estimated to be generating $85,000 per month, averaging about 500 to 600 orders per day.
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Order volumes would need to be double that to break even. I ordered on the app to test out the experience.
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It says it should be ready in just a couple of minutes.
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Walking up to the store here is Luckin.
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Thank you, thank you.
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Luckin had some really interesting and innovative drinks in there. I saw pineapple cold brew on the menu. This is a coconut iced latte.
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It's one of their most popular drinks and it's really good. It's just a hint of coconut and not too sweet. The company rolled out nearly 120 new drinks and food items in China in 2024, but it launches these new varieties carefully using a strategic, data driven approach to test new products on the market.
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Neither Starbucks nor Luckin agreed to an interview with CNBC for this story, but the Chinese Coffee company had noted in a press release that its initial soft launch in New York City would enable the company to gain localized operational insights into site selection, product innovation, and customer experience, providing valuable insights for the company's global expansion.
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Traffic to the Starbucks across the street from the Midtown location that we visited was not particularly affected during the initial weeks of its launch.
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This specific Starbucks was already seeing large year over year drops in visits, irrespective of the Luckin opening. Replicating Luckin's success in China here in the US may not be as easy as it seems.
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Here in the United States, the coffee culture is much more mature and a new brand for a new challenger.
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It might seem they are facing some local competition to national competition, and so displacing some of the larger players might be just harder. Secondly, purely from a cultural standpoint, especially in this day and age, we are seeing the United States retrenching a little bit more toward American brands.
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And while many chains are rewarding customers for using their mobile app, some might be adverse to that as their only option.
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The woman in front of me tried to add an additional drink to her order in person, and the guy said no. You know, it all has to go through the app. The guy behind me walked in, and I guess he didn't realize that it was an entirely mobile, cashier less environment, and he tried scanning the QR code, downloading the app, got frustrated and just walked out. So there still seems to be a little bit of friction around this idea of an entirely mobile environment.
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It's distinct from Starbucks, which is telling you sort of coming into stores that employee connection is still important.
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Luckin doesn't necessarily have that right. So I think our view would be that that isn't a broader threat to Starbucks do they establish somewhat of a foothold in major cities.
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But the past couple years have been rocky for Luckin's main competitor, Starbucks.
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The company brought in former Chipotle CEO Brian Niccol last year to revitalize the brand.
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The higher cost the company $85 million in cash and stock compensation.
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He's made all sorts of top down efforts, like having baristas write messages on the cups and adding more comfortable seating into the stores to revive the brand's coffeehouse image.
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In the case of the United States, for Luckin will be trying to approach the oversea expansion without necessarily having the same level of localized and deep rooted experience into this market that enable them to be scaling rapidly in China.
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I'm not saying that this may not be a threat to Starbucks, but Starbucks has still the incumbent.
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They still are significantly more relevant for a US consumer. What we have seen in the store might be indicative of the fact that if the awareness were to be rising, consumers might be liking that product and could be a potential threat to Starbucks.
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Do you need to cut price at all? You talk about the value scores. Given there are so many new entrants into the beverage space with so much added competition.
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Mcdonald's, Luckin there are so many others. Are you thinking about price cuts?
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I do believe we are a premium brand, and I do believe you get a premium experience with the Green Apron service model.
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And what we're doing to our coffee house is to give people that coffeehouse experience again. So I think we're priced correctly right now, and I like our competitive position.
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Where Luckin shines is value.
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Its products are not actually that far off from Starbucks' prices.
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A latte at the Luckin we visited was $5.75 at Starbucks. It's $5.95.
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The key difference, however, is that customers are rarely paying that full price at Luckin. They are showered with coupons in the app, often in the range of 30 to 50% off.
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In 2024, Starbucks began offering frequent deals and promotions within its app, too.
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This attracted customers that were more price sensitive, but Niccol had the company move away from that.
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He was driving away the core consumer base, who was feeling fairly disappointed by the lower quality of experience, despite the premium price that they would need to pay for for a Starbucks coffee.
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Starbucks is a premium brand, and by virtue of being a premium brand, you attract consumers that on average tend to be a little bit more price insensitive, a little bit less attracted by by discount.
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And so they can protect their margins a little bit better than a company that is mostly known for their discount models.
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Based on its track record in China, Luckin could absolutely pose a threat to Starbucks dominance in the US.
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But this is Starbucks home turf, and despite some recent speed bumps, the company has managed to scale its operations here profitably for years.
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Plus, the coffee market is highly saturated in the US with thousands of local players.
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Now, only time will tell just how big of a disruptor Luckin will be.
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Context & Background
The video discusses the rise of Luckin Coffee, China's largest coffee chain, as it attempts to compete with Starbucks in the United States. Despite being a relatively young company, established in 2017, Luckin has rapidly expanded its presence in China and has recently launched its first stores in New York City. The challenges Luckin faces in the American market are significant, particularly regarding profitability and brand recognition, as highlighted by its innovative yet risky business model. This context provides vital insights into commercial strategies and market dynamics relevant for English speaking practice, especially for those interested in business communication.
Top 5 Phrases for Daily Communication
- “It had a number on the coffee counter 00002.” - Useful for discussing inventory or item rankings.
- “Luckin may be looking to scale its locations here into the thousands.” - Great for speaking about growth strategies.
- “They are trying to optimize for transactions.” - Good for financial discussions and efficiency in business.
- “Order volumes would need to be double that to break even.” - Important for cost management and profitability conversations.
- “The app showers you with coupons.” - Handy for discussions around marketing techniques and promotions.
Step-by-step Shadowing Guide
To effectively improve your English speaking skills using this video as a resource, follow these steps:
- Watch and Listen: Start by watching the video without any subtitles. Pay attention to the speaker's tone and intonation.
- Initial Shadow Speech: Rewind to the first phrase you want to practice. Play the segment and simultaneously emulate the speaker's pronunciation and rhythm. A shadowing app can be particularly beneficial for this step.
- Chunking Technique: Break down sentences into smaller parts. Repeat each segment until you feel comfortable before moving to the next. This technique aids in smoother speech flow, ideal for IELTS speaking practice.
- Record Yourself: Use your smartphone or a recording device to capture your shadow speech. Compare your recording with the original audio to identify areas for improvement.
- Daily Practice: Dedicate a few minutes each day to revisit the phrases, alternating between different phrases and applying them in new contexts. This consistent practice will enhance your fluency and confidence in English speaking.
By integrating this step-by-step shadowing guide into your routine, you can significantly boost your English communication skills and engage more effectively in discussions about contemporary business topics.
What is the Shadowing Technique?
Shadowing is a science-backed language learning technique originally developed for professional interpreter training and popularized by polyglot Dr. Alexander Arguelles. The method is simple but powerful: you listen to native English audio and immediately repeat it out loud — like a shadow following the speaker with just a 1–2 second delay. Unlike passive listening or grammar drills, shadowing forces your brain and mouth muscles to simultaneously process and reproduce real speech patterns. Research shows it significantly improves pronunciation accuracy, intonation, rhythm, connected speech, listening comprehension, and speaking fluency — making it one of the most effective methods for IELTS Speaking preparation and real-world English communication.
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