Luckin Coffee has surpassed Starbucks as the largest coffee chain in China and is now expanding to the U.S. Luckin’s first U.S. store opened in New York City with five locations in the city. The company’s app offers discounts making drinks cheaper than competitors.

Experts warn that Luckin’s current business model may not be sustainable. Stores are operating at a loss due to pricing levels and sales volume. Bernstein found that stores need to double daily order volumes to break even. Luckin’s focus is on growing awareness despite initial losses per store.

Luckin’s lower prices aim to attract consumers and make it profitable in the U.S. Starbucks emphasizes its premium brand image, believing consumers are less price sensitive. Starbucks CEO Brian Niccol and Bernstein’s Danilo Gargiulo highlight the importance of being a premium brand for protecting margins.

Read more at Yahoo Finance: Chinese Coffee Chain Wants To De-Throne Starbucks, But Experts Say Its Business Model Will Never Work