Luckin Coffee Surpasses Starbucks in China, Faces Roadblocks in Bid to Enter Taipei

First Store in Taiwan Chosen for Nanjing Fuxing
Taiwanese Ministry of Economic Affairs: "Application Must Be Filed with Investment Review Office"

Amid rising tensions between China and Taiwan, the largest domestic coffee chain in China has made a move to enter the Taiwanese market. In response, Taiwanese authorities, wary of the inflow of Chinese capital, have moved to block the attempt.

According to Taiwanese media, including the United Daily News on September 11, Luckin Coffee, China’s number one coffee brand headquartered in Xiamen, has selected Nanjing Fuxing, one of the busiest commercial areas in Taipei, as the location for its first store in Taiwan. The outlets reported that after Luckin Coffee’s job postings for positions in Taiwan were issued last year, delivery companies are now delivering cargo boxes with the Luckin Coffee logo to the selected commercial district.

A view of a Luckin Coffee store in Beijing, China. Photo by Reuters and Yonhap News Agency

According to sources, the company planning to open the Luckin Coffee store in Taiwan is Shunwei Holdings, which was registered in the southern Zhanghua region in September with a capital of 5 million Taiwan dollars (about KRW 210 million). The head of Shunwei Holdings, Ung Chang-Liching, previously served as an executive at Sunda Food Seasoning Company, a supplier of coffee beans to Luckin Coffee.

Although Shunwei Holdings is registered with purely Taiwanese capital, it is known to be closely linked to the coffee bean supply chain for Luckin Coffee. As a result, the Taiwanese government has shown increased interest in Shunwei Holdings’ founding capital and its actual controlling rights.

Recently, Taiwan’s Ministry of Economic Affairs sent a letter to the law office of Shunwei Holdings stating that if Luckin Coffee wishes to invest in Taiwan, they must apply directly to the ministry’s Investment Review Commission.

Kung Ming-Hsin, Taiwan’s Minister of Economic Affairs, stated the previous day that the opening of stores in Taiwan by Chinese capital falls under cross-strait approval matters, and that applications must be submitted and reviewed according to related procedures. He added, “Luckin Coffee sought to proceed with registration in the form of a franchise in Taiwan,” explaining that the competent authority must confirm whether the relationship between Luckin Coffee and Shunwei Holdings is a simple agency arrangement and whether there are links to Chinese capital.

In response, Shunwei Holdings stated that it had established the company with Taiwanese capital and tried to address the concerns of the Ministry of Economic Affairs by hiring local Taiwanese workers. They protested that the transfer of authority for investment review from the Department of Commerce to the Investment Review Committee was “a bolt from the blue.” They further noted that from the perspective of Shunwei Holdings, which is investing about 10 million Taiwan dollars (about KRW 420 million) each month to establish Luckin Coffee’s presence in Taiwan, the possibility of failing to open a store in Taiwan has now become real.

Founded in Beijing, China, in October 2017, Luckin Coffee has experienced explosive growth and is now the leading coffee brand in China. The company was listed on the NASDAQ in the United States in 2019 but was delisted the following year after sales fabrication was uncovered. Since then, Luckin Coffee has pursued a turnaround, changing its management and ownership structure, while also launching overseas expansion starting with Singapore in 2023. In June of last year, the company simultaneously opened two locations in Manhattan, New York, marking its re-entry into the U.S. market.

In terms of China’s coffee market share, Luckin Coffee has surpassed Starbucks by a wide margin. While Starbucks’ market share in China dropped from 34% in 2019 to 14% in 2024 based on the number of stores, Luckin Coffee's share surged to 32.6% in the same year—more than double that of Starbucks.

This content was produced with the assistance of AI translation services.