A Comeback?! Lu Zhengyao Returns to the Coffee Race!

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Lu Zhengyao's New Venture: Cotti Coffee

Recent reports suggest that Luckin Coffee founder Lu Zhengyao is planning a new entrepreneurial project, preparing to launch a brand-new coffee brand—Cotti Coffee, which is said to be Lu Zhengyao's third business venture.

On Lu Zhengyao's business journey, this Cotti Coffee venture is not actually his third startup. Previously, he had been involved in many fields with non-listed ventures. CAR Inc. was Lu Zhengyao's first listed project, while Luckin Coffee was his second.

After being forced to leave Luckin Coffee in 2020, Lu Zhengyao began venturing into the unfamiliar food and beverage industry, registering a company called Shejian Technology. However, its development seems less than ideal, as the company has not yet announced any listing plans.

With this new project Cotti Coffee being referred to as his "third venture," could there be plans for an IPO? This remains to be seen as events unfold.

Company Background and Key Players

According to Tianyancha data, Cotti Coffee (Tianjin) Co., Ltd. was established in May 2022, with Wang Baiyin as the legal representative and a registered capital of $100 million. Its business scope includes catering services, food sales, and internet food retail. The company is wholly owned by MAIN MARVEL LIMITED, though the brand's trademark was registered by Shejian Technology (Beijing) Co., Ltd.

The relationship between these two individuals can be traced back to Lu Zhengyao's leadership at Borgward and the Shenzhou group of companies, making them close business partners without blood relations. In 2020, when the American short-selling firm Muddy Waters Research published a report exposing Luckin's financial fraud, it directly pointed to Lu Zhengyao transferring benefits to Wang Baiyin.

Although Wang Baiyin is the legal representative of Cotti Coffee, judging from the trademark registration company and the new project's management team, it's highly likely that Lu Zhengyao is the orchestrator behind Cotti Coffee.

According to reports, the management team of the Cotti Coffee project comes from major new economy enterprises such as Luckin Coffee, CAR Inc., and Shenzhou Chauffeur—most of which were founded and led by Lu Zhengyao.

Strategic Vision and Brand Concept

Compared to founding Luckin Coffee, this Cotti Coffee venture can be seen as a culmination of Lu Zhengyao's years of experience in the food and beverage industry. It combines the thinking applied when founding Luckin + the market and consumer needs observed in the food and beverage industry over the past two years + future consumption trends of coffee consumers, creating a brand-new, coffee-centric lifestyle concept.

The name Cotti Coffee also carries significant meaning. The word "Cotti" comes from the Italian biscuit "Biscotti," which generally means "biscuits" in Italian. This type of biscuit has a hard, crispy texture, making it one of the essential accompaniments in coffee shops—a cup of coffee and a biscuit can while away an entire afternoon. It also suggests that coffee shops are not just places to sell coffee, but also venues for people's leisure and entertainment.

Business Model and Strategy

According to leaked screenshots from Cotti Coffee's brand manual, the coffee chain will adopt two store formats: standard stores (80-200 square meters) and mini stores (less than 50 square meters).

From the menu, it's clear that Cotti Coffee focuses on all-day dining. In the morning, they offer coffee + biscotti; at noon, they provide meals; in the afternoon, they serve snacks; and in the evening, they offer alcoholic beverages.

Looking at the store structure and menu, Cotti Coffee appears poised to "capture" both the Luckin and Starbucks markets. It combines Luckin's advantages (fast and affordable) with Starbucks' strengths (seating available) while addressing their respective shortcomings. It also provides services such as light meals and beverages.

Market Position and Competition

In the current coffee industry landscape, competitors are generally divided into several categories: independent shops focusing on specialty coffee, small-format stores selling fast-moving coffee, large stores providing space, those offering light meals and snacks, those focusing on e-commerce sales, and cross-brand collaborations. New entrants typically choose one of these tracks.

Although competition in the coffee industry has become increasingly fierce and market tracks seem crowded, judging from Cotti Coffee's team and determined business approach, Lu Zhengyao appears to be building a new track by combining the advantages of existing tracks.

Future Prospects

With Lu Zhengyao now returning to the scene, can Cotti Coffee secure its place in the market? This remains an exciting prospect to watch. For consumers, comprehensive services + high value for money—that's what truly makes a brand appealing!

Image source: Internet

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