How Starbucks Lost the Top Spot in China’s Coffee Race
4 min
Flush with capital and under new leadership, Luckin now operates about 13,300 stores, with all but a handful located in China. That is roughly double Starbucks’s 6,800 locations in the country. To fuel its growth, Luckin has tapped rapid delivery services, mobile payment options and offerings such as a cheese-flavored latte that has been a hit with Chinese taste buds.
Seattle-based Starbucks, the world’s largest coffee chain, for decades has counted expansion in the world’s second-most-populous nation among its top priorities. Former CEO Howard Schultz has said China represents one of Starbucks’s biggest opportunities for growth—although it is a complicated place to do business. China is now Starbucks’s second-largest market by stores and revenue after the U.S.
Traditionally a tea-drinking society, China consumes little coffee compared with many other countries, but Chinese demand is growing, companies say. Analysts expect China to become the world’s largest consumer market in the next several years. Big Western brands selling to Chinese consumers face rising competition from local brands, as consumers begin to show a preference for them.
Starbucks sales in China are growing, the company said, along with competition from Chinese rivals. Luckin declined to comment.
Kiki Pang, a Guangdong-based marketing executive, drinks coffee about twice a week. She often orders a Luckin latte for delivery to her office in the afternoon while working, and pays through the WeChat app.
“Starbucks used to be quite popular among young Chinese consumers,” said Pang, 26. “Now that young people in China have more beverage options, the dynamics have changed.”
The pandemic badly hurt Starbucks’s Chinese business, with its same-store sales in the country falling 17% in its 2020 fiscal year compared with 2019. Now, many Chinese consumers are continuing belt-tightening habits formed during the pandemic.
Starbucks executives have remained steadfast on China. The company said in November that it aims to add around 1,000 stores in China a year, growing to 9,000 by 2025. Executives said China would one day become Starbucks’s largest market. “I am very confident that is only the beginning,” Starbucks China Co-CEO Belinda Wong said at the November investor event.
Luckin, founded in 2017 and backed by venture capital during a tech funding boom in China, opened bare-bones stores at a faster clip than Starbucks’s more-elaborate cafes did. It centered its strategy around its mobile app and integrated delivery services from the outset, a to-go option Starbucks later added to its Chinese operations. Luckin had 3,680 stores by the fall of 2019, nearing the 4,130 Starbucks had built over two decades by that year. Luckin went public in 2019.
In 2020, Luckin admitted that it had fabricated around $310 million of its previous year’s sales. The
delisted the company later that year. Luckin vowed to rebuild, bringing in new executives and investment from Chinese private-equity firm Centurium Capital. The chain opened its 10,000th store in China this summer, and celebrated by offering millions of customers coffee deals.
Luckin reported $855 million in sales for the quarter ended June 30, ahead of the $822 million Starbucks generated in its China business for the three months ended July 2, company filings show. Luckin’s sales lead widened in company reports in November.
Luckin has touted its value for consumers and some hit flavours, including a collaboration with popular Chinese luxury liquor brand Kweichow Moutai this year.
Starbucks is pumping out its own new beverages in China, launching 28 there this summer. Executives said that Starbucks is the only coffee brand in China offering a full suite of beverages, food and merchandise, with prime locations around the country. It is building stores in smaller counties and in September opened a $220 million innovation center in China.
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Starbucks CEO Laxman Narasimhan said at the investor event that Starbucks provided a better experience and higher quality to Chinese consumers, compared with lower-priced rivals.
Sunny Shen, a business consultant living in the coastal Jiangsu province north of Shanghai, said she drinks coffee several times a week. Recently, she indulged in one of Luckin’s limited-edition Tom and Jerry mascarpone lattes. She also appreciates Luckin’s value.
She said: “Especially when they issue coupons, Luckin can be a half or a third of a Starbucks coffee.”
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Sydney Children’s Hospitals Foundation CEO Kristina Keneally says Australia’s culture of large-scale philanthropy is becoming more sophisticated as Gold Dinner raises $75.5 million for children’s health, research and innovation.
3 min
Australia’s wealthiest donors are becoming more strategic, more ambitious and increasingly focused on creating measurable impact, according to Sydney Children’s Hospitals Foundation chief executive Kristina Keneally.
Speaking after the 2026 Gold Dinner, held last week in Sydney, Keneally said Australia was experiencing a significant shift in how major philanthropy is viewed, with large-scale giving increasingly part of conversations about leadership, legacy and social impact.
The annual Gold Dinner, now in its 29th year, brought together some of the country’s most influential business leaders, philanthropists and cultural figures, raising $75.5 million and counting in support of the Sydney Children’s Hospitals Network.
While the event has become one of Australia’s most prestigious fundraising gatherings, Keneally said its significance extends far beyond a single evening.
“Gold Dinner, the flagship event of Sydney Children’s Hospitals Foundation, represents far more than a single evening. It is a powerful demonstration of what a committed community can achieve together over 12 months,” she said.
“The strength of that community, and the trust built over nearly three decades, means people return not just for the event, but for the impact they know it delivers.”
A NEW ERA OF PHILANTHROPY
Large-scale philanthropy has long been a feature of American society, where charitable foundations and major donors often play a prominent role in funding medical research, education and social programs.
Keneally believes Australia is moving in a similar direction.
“Australia is building a stronger culture of large-scale philanthropy, but it is still evolving compared to the United States, where giving at scale is more deeply embedded and widely recognised,” she said.
She said the country’s philanthropic landscape was becoming more sophisticated as successful business leaders increasingly sought opportunities to create meaningful change through their giving.
“In Australia, while generosity has always been strong, large-scale giving has historically been less visible, but that is changing rapidly as more leaders embrace philanthropy as a powerful way to drive meaningful outcomes.”
According to Keneally, events such as the Gold Dinner are helping reshape public perceptions of philanthropy by demonstrating the tangible outcomes that major donations can achieve.
“Gold Dinner is helping to reshape how philanthropy is perceived in Australia, making it more visible, more aspirational and more connected to real-world outcomes,” she said.
WHERE THE MONEY GOES
The funds raised through Gold Dinner support clinical care, research and innovation across the Sydney Children’s Hospitals Network.
Over the past 12 months, more than $75.5 million has been raised to help fund advanced medical equipment, innovative care models and world-leading medical research. Areas of focus include precision medicine and early diagnosis, where emerging technologies are already changing how childhood illnesses are detected and treated.
Keneally said the impact is felt directly by children and families facing some of the most difficult moments of their lives.
“For children and families, this translates into very real and immediate impact. It means faster diagnoses, earlier access to life-saving treatments, and care that is more personalised and effective,” she said.
“It also ensures hospitals are equipped not just to respond to illness, but to reimagine what care can look like, giving children the best possible chance not only to survive, but to live full, healthy lives.”
BUSINESS LEADERS BACKING CHANGE
One of the defining characteristics of Gold Dinner is the calibre of its supporters.
The event has evolved into a meeting point for influential leaders from business, culture and philanthropy, many of whom see charitable giving as an extension of their professional and personal legacy.
“It speaks to a community that is not only generous, but increasingly ambitious in how it gives, combining influence, expertise and purpose to achieve outcomes at scale,” Keneally said.
Among the major supporters of this year’s event were Presenting Partner, John-Paul Nassif Foundation; Major Partners, ABC Bullion, Shaw and Partners Financial Services and One Circular Quay by Lendlease; and Premier Partner, Range Rover, whose ongoing support reflects a shared philosophy of legacy and long-term impact.
The evening also featured performances, premium hospitality experiences and fundraising initiatives designed to encourage further support for children’s health services and research.
LOOKING BEYOND NEW HOSPITALS
With major new children’s hospital developments at Randwick and Westmead progressing, Keneally said the focus is increasingly turning towards what comes next.
“The long-term vision is to ensure every child has access to world-leading healthcare, care that continues to evolve through innovation, research and global collaboration,” she said.
The foundation’s future priorities include accelerating medical discovery, expanding access to cutting-edge treatments and helping position New South Wales as a global leader in children’s health.
Keneally said the Gold Dinner remains central to achieving those ambitions because it does more than raise money.
“Gold Dinner is critical to making that vision possible. It not only provides significant funding, but also unites a powerful network of supporters who are driving the future of philanthropy in Australia,” she said.
As Australia’s culture of philanthropy continues to mature, Keneally believes that the network will play an increasingly important role in shaping the future of healthcare for generations to come.
“The result is a community that is helping to shape the future of paediatric care, not just for today’s patients, but for generations to come.”
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