Luckin Coffee, the coffee shop startup using market acquisition tactics borrowed from China’s internet companies, has written an open letter to Starbucks accusing it of monopolistic practices in the country and proposing a possible lawsuit, according to Tencent News (in Chinese). Luckin has taken issue with Starbucks’ exclusivity rights with property owners and putting pressure on suppliers not to work with other brands.

Luckin Coffee said that Starbucks has signed contracts of exclusivity with commercial property owners which prevent them from granting leases not just to other coffee shop chains, but any other business where over 30% of operating income is derived from coffee sales or even whose names are related to the word “coffee”. This also applies when the Starbucks stores are not yet open.

Luckin Coffee has opened 400 stores in its first four months in 13 cities across China and is looking for locations nationwide. It describes itself as part of China’s “new retail” trend.

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Frank Hersey

Frank Hersey is a Beijing-based tech reporter who's been coming to China since 2001. He tries to go beyond the headlines to explain the context and impact of developments in China's tech sector. Get in...