How Can a Coffee Store Survive the 9.9 Yuan Price War?

Independent coffee stores are under heavy pressure as chains like Luckin and Cotti expand with 9.9-yuan pricing. Roughly 35,000 shops have disappeared over the past year, and most of them are believed to be independent operators. Falling foot traffic, rising costs, and competition for the same customers have pushed single-store owners to look for paths that chain discounts cannot easily copy.

The market now splits into brand chains such as Starbucks, COSTA, Luckin, M Stand, and Manner, and independent specialty shops that usually run one location. Industry discussion points to preserving coffee supply chains and emphasizing atmosphere and service, since customers say they pay thirty or forty yuan mainly for the setting rather than the drink alone.

Recently, a topic about independent coffee shop owners being crushed by 9.9-yuan coffee hit the trending searches, sparking widespread discussion. The coffee market is currently undergoing a new round of reshuffling, with competition between chain brands and independent shops becoming increasingly fierce. Brands like Luckin and Cotti have captured a large market share through rapid expansion and low-price strategies, while independent coffee shops face multiple pressures such as declining foot traffic and high costs. Data shows that nearly 35,000 stores have disappeared amid the industry turmoil over the past year, most of which are likely independent coffee shops. This article provides an in-depth analysis of the industry landscape behind the price war, the multiple reasons for the closure of independent coffee shops, and how some practitioners are finding alternative paths to survival, as well as exploring how specialty coffee can stay true to its roots and stage a comeback against the odds.

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Currently, coffee shops on the market can be roughly divided into two categories: first, brand chains, including international chains like Starbucks and COSTA Coffee, as well as domestic brands like Luckin, M Stand, and Manner; second, independent coffee shops opened by individual entrepreneurs, also known as specialty coffee shops, which typically operate on a single-store model. The current coffee market is undergoing a new round of reshuffling.

Yesterday, a trending topic #IndependentCoffeeShopOwnersComplainAboutBeingCrushedBy9.9YuanCoffee# made it to the trending searches, sparking discussion among netizens.

In response, some netizens believe that survival of the fittest is a normal phenomenon.

Some netizens also pointed out that specialty coffee and chain coffee are not competing in the same lane. Although the prices are higher than chain coffee brands, choosing a specialty coffee shop is mainly about enjoying the environment and atmosphere inside the store, "Paying thirty or forty yuan is mainly for the ambiance."

In recent years, the most obvious change in the coffee sector has been the increase in the number of chain coffee brand stores, with the fastest growth coming from Luckin Coffee and Cotti Coffee. According to media reports, Luckin stated that by the end of this year, the number of Luckin Coffee stores is expected to exceed 15,000. As for Cotti Coffee, which only opened its first store in October 2022, according to media reports, its store count has already exceeded 6,000 as of now.

At the same time, the price war has also been a major phenomenon in the coffee sector in recent years. Luckin's pricing ranges from 10 to 20 yuan, and with frequent coupon stacking, you can get a cup of coffee for 10 to 15 yuan. Cotti's pricing range is not much different from Luckin's.

Faced with such a price war, for consumers, it is undoubtedly a feast. But for independent coffee shops, it is a disaster.

According to Zhaimen Canyan data, as of September 13, nearly 77,083 new stores opened in the past year, with a net increase of 42,450 in the past year. A simple mathematical comparison shows that nearly 35,000 stores have "disappeared" amid this year's industry turmoil.

Since the above data does not specify whether the disappeared stores are coffee chain brands or independent coffee shops, but based on the expansion of coffee chain brands and feedback from independent coffee shop entrepreneurs, the trend of closures is likely predominantly among independent coffee shops.

Undeniably, coffee remains one of the most watched sectors today, even amid a volatile and uncertain macro environment, and reduced opportunities caused by excessive involution in the coffee market. This means that operators who decide to enter this arena on a whim, without doing solid homework and without sound operational knowledge, are bound to meet a painful end.

Some practitioners believe that the price war is only one external factor; looking through many cases, it is found that the reasons for independent coffee shop closures are more often due to poor location selection, blind operation, vague positioning, lack of professional knowledge, poor service, unpleasant music, insufficient competitiveness... these are the real causes.

In addition, there are also cases of closure due to partnership breakups or joining unstable franchise projects.

Competition in the coffee sector has, more than anything, accelerated the death of independent coffee shops. Furthermore, coffee shops founded by individual operators do not possess the advantages of brands like Luckin and Cotti Coffee — supply chain advantages, as well as unified standard equipment and processes across stores, resulting in more consistent taste. More importantly, such brands do not rely solely on selling coffee for profit, but also have diverse revenue streams such as high franchise fees.

Faced with such circumstances, many coffee practitioners or independent coffee shop owners have begun to find alternative paths. Some have succeeded on Douyin by building their own personal IP, some attract consumer attention through products, and some even produce various derivative merchandise to support operations.

Overall, running a coffee shop still requires genuine dedication to sustain long-term operation. Individual operators should focus on figuring out what their customers truly need, rather than engaging in price wars and involution with chain coffee brands. In the face of this adversity, we hope everyone can stay true to their original aspirations and stage a comeback against the odds.

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The above content is compiled by CoffeeHunters, a coffee news website.