Can Cotti Coffee Hit 10,000 Stores in Three Years?
Lu Zhengyao's new brand Cotti Coffee opened its first store at the Fuzhou IFC International Financial Center, pricing all drinks at 9.9 yuan during the soft-opening period. The menu covers more than 40 items including coffee, tea, smoothies and sundaes, with drinks such as coconut latte and cheese latte normally priced between 18 and 32 yuan.
The low-price playbook mirrors Luckin's early approach and targets a market spreading from first- and second-tier cities into third-, fourth- and fifth-tier areas, where 30 to 40 yuan per cup is a real barrier. Competition includes Luckin, Starbucks and cross-industry players like KFC TO GO and Mixue's Lucky Cup; whether Cotti can repeat Luckin's 2,073 stores in year one is the open question.
Coffee consumption is spreading from first- and second-tier cities to third-, fourth-, and fifth-tier markets, yet the price threshold for freshly ground coffee still gives many office workers pause. Lu Zhengyao has opened the first location of his new brand Cotti Coffee in the Fuzhou IFC International Financial Center, with all drinks priced at 9.9 yuan during the soft-opening period, continuing a familiar low-price playbook. The product line covers more than 40 items including coffee, tea, smoothies, and sundaes, with popular items such as coconut latte and cheese latte all included, originally priced between 18 and 32 yuan. Facing the two giants Luckin and Starbucks, as well as cross-industry players like KFC TO GO and Mixue Ice Cream & Tea's Lucky Cup, whether Cotti can replicate Luckin's achievement of opening 2,073 stores in its first year is worth watching.
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In recent years, coffee consumption has continued to heat up, and the market is gradually sinking from first- and second-tier cities to third-, fourth-, and fifth-tier cities, with freshly ground coffee having become a daily choice for many office workers. However, prices of thirty to forty yuan per cup also put pressure on some consumers. With the expansion and downward penetration of the coffee market, low-price coffee has begun to emerge.
Lu Zhengyao's new project Cotti Coffee recently opened its first store in the IFC Fuzhou International Financial Center, with all drinks uniformly priced at 9.9 yuan during the soft-opening promotion period, a strategy quite similar to Luckin's approach of opening up the market with low prices back then.
Judging from the prices displayed in the mini program, Cotti Coffee's pricing range is close to Luckin's. At present, Cotti's products cover more than 40 categories including coffee, tea drinks, smoothies, and sundaes, with currently popular coffee products such as coconut latte and cheese latte already available, originally priced between 18 and 32 yuan, and all products uniformly discounted to 9.9 yuan during the soft-opening period.
This kind of large discount in the early opening period easily reminds people of early Luckin—free first cup for new customers, then a 50%-off coupon, and entering the light food market with 50% off, among other moves. The similar playbook inevitably draws attention to the connection between Lu Zhengyao and Luckin. Soft-opening promotions are a common business tactic used by many brands and often produce remarkable results. This time, Lu Zhengyao and Qian Zhiya have not introduced any new tricks, but instead followed a mature, conventional playbook.
Although from the available information Cotti Coffee and Luckin Coffee share many similarities, whether re-entering the coffee track can create another "Luckin" is still difficult to determine. After all, the coffee industry today is no longer in the bonus period it was when Luckin entered the market. Ahead are the two giants Luckin and Starbucks occupying the market, and behind are various brands entering the track one after another. Although the track is hot, competition is becoming increasingly fierce.
Not long ago, KFC independently operated a coffee store KFC TO GO in Shanghai and raised the banner of specialty coffee. As a food giant, KFC's marketing campaign this time focuses on "bringing SOE into the 9-yuan era"—not only affordable, but also specialty SOE, and this selling point has indeed attracted many consumers. SOE refers to espresso made from single-origin coffee beans. What KFC currently offers is American Antigua SOE coffee beans.
Not only that, tea drink giant Mixue Ice Cream & Tea has also launched a low-price coffee offensive. Its freshly ground coffee brand Lucky Cup has directly pushed coffee consumption into the single-digit pricing range: 5 yuan for an Americano, 6 yuan for a latte, and 10 yuan for a specialty drink. It can thus be seen that the coffee track has become an important battlefield contested by giants from various industries.
Cotti Coffee may hope to take a high-end position while also achieving rapid expansion, fulfilling a plan to open 10,000 stores in three years. But at present, China's coffee market is increasingly prominent in its advantage in the direction of cost-effectiveness. Against this background, if Cotti directly takes the high-end route, it will undoubtedly face certain limitations.
Now returning to the coffee industry, using a similar strategy and a similar entrepreneurial team, can Lu Zhengyao make Cotti Coffee replicate Luckin's commercial miracle of opening 2,073 stores in its first year of entrepreneurship? Let us wait and see.
Image source: Internet
The above content is compiled by CoffeeHunters, a coffee news website.
