Recently, JD Delivery adjusted the cost-sharing method for its "10 Billion Subsidy" campaign, changing it from being fully borne by the platform to a 50-50 split with merchants, which sparked strong backlash from many participating merchants. Many merchants reported that the new rules not only severely squeezed their profit margins but also exposed them to pressure such as forced participation and traffic downgrading, with some orders even generating negative revenue. Chen Ziyu, the owner of the coffee chain brand Grid Coffee, publicly called out, "Stop it, Ah Dong," pushing the conflict into the spotlight of public opinion. As the incident continues to escalate, the trust relationship between merchants and the platform is facing a severe test. [more…]

Recently, the Chongqing Coffee Industry Association published an open letter regarding JD Takeout's "10 Billion Subsidy" program, directly accusing the platform of driving the prices of freshly made coffee beverages down to rock bottom through hefty subsidies, which has severely squeezed the market share of local independent coffee brands, with some brands seeing declines in both online transaction volume and average order value. The open letter sparked heated discussion among netizens: on one side, food and beverage industry practitioners empathize with the involution caused by subsidies; on the other, consumers strongly support low-priced coffee. Is this subsidy war promoting industry reshuffling or stifling innovation? Can the differentiation strategy of independent coffee shops hold its ground in the price war? This article takes you through the whole story and the views of all parties. [more…]

In the coffee sector, nearly 90,000 new stores have opened in the past year, with a net increase of over 48,000, and amid fierce competition, brands are rolling out various strategies. Cotti, which ranks third in store scale, however, chose to cross over into tea beverages in April, launching new milk tea and fruit tea products unrelated to coffee, which is puzzling—after all, it already owns the tea brand Chamao, which focuses on human-machine collaboration. Behind this strategy is the reality that franchisees are increasingly seeing no hope of profitability and are exiting to cut losses. A franchisee in Hubei reported that the foot traffic data provided during recruitment was severely inflated, and the data used by third-party assessment software was actually outdated from several years ago. The brand relied on these impressive figures to set a record of opening 7,000 stores in 14 months. Now, according to Jihai brand monitoring, Cotti has closed 250 stores in the past 90 days, equivalent to three per day, while Luckin, with more than twice the total number of stores, closed only 89 in the same period. Negative news such as salary cuts, layoffs, and the founder being forced to execute 3 billion yuan in debts has followed one after another, and franchisees are no longer willing to be mere also-rans. [more…]

A recently leaked Series B financing business plan for Luckin Coffee shows that in the first three quarters of 2018, the brand's cumulative sales revenue was 375 million yuan, while its net loss reached as high as 857 million yuan, with a gross margin of -115.5%, in stark contrast to Starbucks' gross margin of over 50% for five consecutive years. In response to outside doubts, Luckin officially said that the full-year loss would be far greater than that figure and stressed that spending money on subsidies is an established strategy, with the loss in line with expectations. This article sorts through Luckin's revenue targets, user data, and its full official response, while also looking at the quality route behind its choice of coffee beans and equipment, offering a reference for coffee lovers. [more…]

Luckin Coffee reached a $187.5 million settlement agreement with the SEC, a massive fine equivalent to the profits from selling tens of millions of cups of coffee. From the Muddy Waters short-seller report to admitting to 2.2 billion yuan in fraud, and then to the Nasdaq suspension, how did Luckin's capital myth collapse? How did Lu Zhengyao's role in it affect investor confidence? With Centurium Capital completing its equity acquisition and Lu Zhengyao completely out of the picture, can Luckin usher in a rebirth in 2022? This article will provide an in-depth analysis of the causes and consequences of this capital storm and explore Luckin's future path to financing and listing. [more…]

The first half-year report delivered by ChaPanda after its listing in Hong Kong shows that both revenue and net profit declined in the first half of 2024, with net profit falling by nearly 60% year-on-year. The company attributes this to increased support for franchisees and greater market investment. At the same time, the number of stores continues to grow, but its market value has shrunk significantly, and its reliance on external suppliers for its supply chain is also seen as a key weakness. This article will sort through the core data in the financial report, the adjustments to franchise policy and their knock-on effects, and compare the competitive landscape of the industry, to help coffee and tea beverage enthusiasts understand the challenges this brand currently faces. [more…]

In September, India's Ministry of Commerce and Industry announced the removal of restrictions on tea cultivation locations and growers, after which the Tea Board of India suspended seven sections of the 1953 Tea Act. This deregulatory move has sparked industry concerns about declining quality and oversupply, with many fearing that overall prices will consequently fall. Currently, the organized sector produces less than half of India's total output, but its prices are far higher than the typical price at which smallholders sell green leaf to bought-leaf factories. Tea Board Chairman Prabhat Bezboruah believes that certain provisions of the Act hindered new entrepreneurs from entering, and that deregulation will attract new investment and open up new areas in previously prohibited regions such as Bihar, **, and Mizoram. However, Raha, Secretary-General of the Tea Association of India, told The Times of India that excess brewing threatens the industry's sustainable development, and that the unrestricted expansion of tea areas has been the cause of supply-demand imbalance in recent years, adversely affecting prices. [more…]

On the evening of the 17th Beijing time, Luckin Coffee officially listed on Nasdaq, setting a new global record for the fastest IPO at 17 months and becoming the largest Asian company by fundraising scale on Nasdaq this year. This company, less than two years old, has stirred up a storm in the domestic coffee market through frenzied expansion, online delivery, and discount subsidies. Why are capitalists so favored of Luckin? Can its coffee quality live up to the title of "master coffee"? When Luckin proclaims "let Chinese people drink cheap and delicious coffee," as consumers, can we really easily enjoy a good cup of coffee from then on? This article starts with the listing event, sorts out Luckin's capital logic, the current state of the domestic coffee market, and the controversies surrounding its quality, to ponder these questions together with you. [more…]

On July 29, 2024, the National Bank of Ethiopia announced a major overhaul of the country's foreign exchange system, effective immediately, centered on introducing a competitive exchange rate formation mechanism based on market supply and demand. This move was seen as a key step toward resolving the country's long-standing foreign exchange shortage, but it also quickly triggered a sharp currency depreciation—the birr plunged about 30% against the US dollar in a single day. As a major global coffee-producing region, how will this policy shift in Ethiopia affect its coffee industry and the international coffee market? This article will outline the specifics of the reform, the exchange rate movements, and their potential transmission effects on coffee exports and prices. [more…]

Luckin Coffee has broken records in the chain coffee industry at an astonishing speed, adding 10,000 net new stores within a year, bringing its total store count close to 20,000, with an expansion pace even surpassing Mixue Bingcheng. However, alongside this runaway scale, problems have followed one after another: a swing from profit to loss in the first quarter, a decline in net profit margin in the second quarter, and a year-on-year drop in same-store sales at directly operated stores. The 9.9 yuan promotional campaign has lowered the average transaction value, making it a real challenge to increase revenue without increasing profit. Facing a price war with rivals such as Cotti and Starbucks, how Luckin balances scale and profitability will be a key proposition for its future operations. [more…]

Instant coffee was once synonymous with Nescafé, Maxwell House, and Old Town, and sat at the bottom of the coffee snobbery chain. But today, new brands like Saturnbird, Yongpu, and Sumidagawa have given instant coffee a makeover, selling it as freeze-dried coffee at 4 to 7 times the price of traditional instant. Though it still falls under the instant coffee category, what exactly makes freeze-dried coffee so expensive? What is the essential difference between its production process and that of traditional instant coffee? Why did freeze-dried coffee, which rose to prominence in 2018, manage to tear open a gap in the instant coffee category and quickly grow into a market worth over 1 billion yuan? This article breaks down the logic behind the popularity of this cup of freeze-dried coffee from three dimensions: craft, brand, and market. [more…]

Recently, foreign media reported that Luckin Coffee is planning a listing in Hong Kong, sparking widespread market attention. In response, Luckin officially responded quickly, emphasizing that management remains focused on business strategy and product services, and that there are currently no arrangements for a Hong Kong listing, with the company still committed to the U.S. stock market and creating long-term value for shareholders. Looking back at Luckin's development trajectory, from its 2019 Nasdaq listing, to the 2020 financial fraud scandal and trading suspension, to completing debt restructuring in 2022, doubling revenue, and surpassing Starbucks China in store count, this brand has demonstrated astonishing self-rescue capabilities. This article will review Luckin's listing turmoil, the details of its settlement, and possible paths for its future return to the capital market, while also exploring the impact of intensifying competition in the domestic coffee market on its prospects. [more…]

As the weather turns colder, information about Cotti Coffee store transfers has noticeably increased on social platforms, including many high-quality stores with monthly net profits of tens of thousands of yuan. Behind the seemingly attractive transfers are transfer fees as high as hundreds of thousands of yuan and long payback periods. Cotti rapidly expanded to more than 6,000 stores thanks to its low-threshold franchising and generous subsidy policies, but the high subsidies also brought high costs and intense competitive pressure. Franchisees are struggling to survive between the price war and commission rules, with some lamenting that they are "helping Cotti build the market, busy but not prosperous." This article will deeply analyze the real survival picture of franchisees under Cotti's subsidy policy and explore the business logic and hidden concerns behind this franchising boom. [more…]

Recently, the food delivery competition between JD.com and Meituan has yet to subside, and Ele.me has now joined the fray with a large number of coupons and subsidies. While delivery users enjoy low-priced milk tea, staff at brands like Molly Tea are under unprecedented order pressure. Drinks that originally cost a dozen yuan per cup have seen their prices plummet to five or six yuan after platform subsidies, or even just a few cents, causing order volumes to instantly double or surge, with some stores handling as many as five or six hundred orders per day. Understaffing, material shortages, riders urging them on, and customer complaints have become the daily reality for these coffee and milk tea workers. This article will take you behind the scenes of this delivery subsidy frenzy to see the real working conditions and helplessness of frontline employees. [more…]

A few days ago, the much-anticipated online bidding event of BOP (Best of Panama) in the coffee industry came to an end. At this top-level auction that attracts the attention of coffee lovers worldwide, the Geisha from the renowned Hacienda La Esmera [more…]

The delivery subsidy war between JD.com and Meituan has unexpectedly spread to Starbucks—after stacking coupons, a breakfast set that originally cost dozens of yuan is now only a little over ten yuan, and you can even get a cup of Starbucks for just over three yuan. Consumers rushed to snap up cakes and bread they normally wouldn't bear to buy, causing the food display cases at many stores to be emptied ahead of schedule, with office workers exclaiming that such a spectacle is rarely seen. Yet store employees are complaining bitterly, as doubled order volumes leave them exhausted. In this clash of the titans between platforms, who really benefits and who suffers? Front Street Coffee takes you through the coffee industry ecosystem behind this delivery melee. [more…]

The food delivery platforms have once again kicked off a subsidy war, with Meituan and Alibaba distributing large numbers of milk tea redemption vouchers to users, triggering a collective surge in orders at chain stores such as Mixue Bingcheng, Chabaidao, Goodme, and Shanghai Auntie. On the night of July 5, orders flooded into tea beverage stores in many places like a tidal wave, receipt printers nearly collapsed, and employees kept busy from the evening shift until the early hours of the morning yet still could not clear the backlog of orders. Some stores urgently called back off-duty employees for support, while delivery riders and customers surrounded the stores so tightly that not a drop could get through. While consumers got milk tea for 0 yuan, the workers behind the counter experienced a night comparable to "doomsday." This game between platforms ultimately shifted the pressure onto the frontline tea beverage workers. [more…]

Recent subsidy promotions on major food delivery platforms have brought consumers tangible savings, with many taking advantage of low prices to stock up on milk tea, coffee, and light bakery items. However, this seemingly win-win promotional feast has stirred up considerable unrest within Luckin Coffee stores. A large number of consumers flocked to stores to buy light food in bulk, directly causing a surge in the number of baked goods that staff need to thaw each night—work that once took just over ten minutes now takes more than half an hour. What leaves employees even more frustrated is that the company has not only canceled performance commissions on light food sales but also requires them to complete thawing tasks strictly according to procedure after closing, forcing many to work unpaid overtime. The cost of this delivery war seems to be quietly borne by frontline staff. [more…]

The subsidy war among food delivery platforms continues to heat up, with large-value coupons frequently being thrust at consumers, and the pressure on in-store production has surged accordingly. Recently, Meituan released a batch of delivery coupons for Heytea that can be expanded to "18-18," meaning a drink priced at over twenty yuan costs only a few yuan after the discount, and can even be made nearly free by stacking red envelopes. As soon as the news came out, netizens rushed to place orders, and Heytea stores in many parts of the country saw orders surge in a short time. Delivery rider capacity could not keep up, and delays, stuck orders, and no one accepting deliveries occurred one after another. Some stores, facing shortages of both materials and staff, could only temporarily close and reopen after all the backlogged drinks had been made. At the same time, frontline employees poured out their daily experiences of order explosions on social platforms, busy from morning to night, with no time even to eat or drink. [more…]

Recently, the buzz around the "Ne Zha 2" collaboration swept through the coffee world, and Cotti Coffee seized the moment to launch themed limited-edition drinks and merchandise, drawing a large crowd of consumers to its stores. Yet just three days into the campaign, some locations saw delivery riders swarming the pickup area, merchandise running out, and staff so swamped they could barely catch their breath. The reason: JD Instant Delivery rolled out hefty subsidies the same day, letting users get takeaway coffee for just a few yuan—or even barely over one yuan—causing order volumes to explode instantly. Caught between collaboration fans and deal-hunters, Cotti stores were severely understaffed, and production efficiency couldn't keep up with demand. Customers waited one to two hours only to leave empty-handed, and negative reviews and complaints poured in. Why did this seemingly lively marketing tie-in turn into a nightmare for frontline employees? Front Street Coffee walks you through the whole story. [more…]