Why are coffee machines and budget chains reshaping the market?
Huwen Coffee, built by the core team behind The Alley, has entered China's budget coffee segment with two price tiers of 10 and 13 yuan, following CoCo's 3.9-yuan Americano and Cotti Coffee's 9.9-yuan promotions. The brand plans to use its existing overseas agency network, prioritizing Southeast Asia, in a price war that started in early 2023.
The low-price wave matters because it pushes more stores to run high-volume coffee machines on thin margins. CoCo's promotion covers over 2,200 stores, while Cotti's event spans more than seventy products, showing how American coffee machines and similar equipment sit at the center of a strategy built on speed, volume, and repeat customers.
At the start of 2023, the coffee market kicked off with a low-price strategy. CoCo都可, with over 2,200 stores nationwide, slashed the price of Americano to 3.9 yuan, Cotti Coffee launched promotions starting at 9.9 yuan, and Ao Tiger Coffee, built by the core team behind The Alley, also secured financing, entering the budget segment with two price tiers of 10 yuan and 13 yuan, and planning to leverage its existing overseas agency network to prioritize Southeast Asia. Can Ao Tiger Coffee become the Mixue Bingcheng of the coffee world? This article will analyze from perspectives such as brand background, store model, product strategy, and market trends.
Just two months into 2023, a low-price whirlwind has already swept through the coffee sector, firing the first price war of the new year.
After the Spring Festival holiday, CoCo (都可) quickly announced that over 2,200 stores nationwide would jointly participate in a coffee price reduction campaign. The Americano originally priced at 12 yuan was only 3.9 yuan during the promotion; the coconut latte was reduced from 17 yuan to 8.9 yuan, and the promotion continued until March 31.
Soon after, Cotti Coffee (COTTI COFFEE), founded by former Luckin Coffee founder Lu Zhengyao, also launched the "Hundred Cities, Thousand Stores Coffee Carnival," likewise lasting until the end of March. All six series and over seventy popular products in the store started at 9.9 yuan, and simultaneous activities such as inviting friends to drink coffee for free and distributing coupons were also launched, with marketing tactics bearing a strong resemblance to Luckin back in the day.
Recently, another emerging coffee brand, "Ao Tiger 虎闻咖啡," completed financing, and its core team actually came out of "THE ALLEY 鹿角巷." The Alley is no stranger to the public; its brown sugar fresh milk series was once a hit, and this tea beverage brand was once popular nationwide, but now it is hard to find.
The last time The Alley attracted widespread attention was in February last year, when it trended on social media for the incident "an internet-famous milk tea brand spent 100 million yuan to fight 7,000 counterfeit stores." The years-long tug-of-war with counterfeit stores consumed a great deal of financial resources and energy, and the poor quality and reputation of counterfeit products in turn dragged down The Alley's brand image. The two-year trademark battle ultimately failed to help the authentic The Alley survive the crisis, and the team had to shift its focus to the coffee sector, seeking a fresh start.
It is understood that Ao Tiger 虎闻咖啡 plans to leverage The Alley's existing agents and partners around the world to export in reverse to overseas markets, with the goal of global expansion, prioritizing Southeast Asian submarkets in the early stage. Thus, compared with fighting in the domestic market, Ao Tiger Coffee is more inclined to go overseas.
At the current stage, Ao Tiger Coffee adopts a fixed-point expansion store-opening model. Ao Tiger 虎闻咖啡 opened its first store in Japan in 2018 (now closed), and in October last year it landed its first domestic store in Hangzhou. At present, there are 4 stores in Hangzhou, with another 2 shown as "opening soon" on Meituan. The stores range from 20 to 50 square meters, mainly comprising office building stores, shopping mall stores, and university stores. To ensure stable coffee taste and production efficiency, the stores are uniformly equipped with fully automatic coffee machines and have built a digital system.
The menu features lattes as the main offering, providing dark and light roast Italian blend beans, paired with regular fancy coffee, creative fruit coffee, and fruit tea. The coffee drinks sold have only two price points—10 yuan and 13 yuan—clearly also taking the path of combining "budget coffee" with milk tea.
At present, Ao Tiger Coffee's popularity on social platforms such as Xiaohongshu is still relatively low, its official account has not yet reached one hundred followers, and check-in records are also rather scattered. However, judging from existing purchase reviews on Xiaohongshu, Meituan, and Ele.me, positive reviews account for the majority, and consumers generally point to brand advantages such as "very cost-effective" and "cheap price."
In fact, the budget coffee targeted by Ao Tiger 虎闻咖啡 is precisely one of the most popular trends right now. In the past two years, coffee and tea beverage brands have frequently launched price reduction promotions. In addition to major coffee chain brands, coffee shops in second- and third-tier cities such as Nanning, Suzhou, Wuxi, and Nanjing have also proactively joined the price war, successively launching budget coffee at around 5 yuan, with the lowest even reaching 3 yuan a cup.
As market enthusiasm continues unabated, coupled with continuous capital support, this wave of low-price coffee competition will probably continue for a long time. In this way, it naturally brings consumers more opportunities to "get a bargain."
The above content is compiled by CoffeeHunters, a coffee news website.
