Cotti Coffee's 9.9 Yuan Strategy for 10,000 Stores! Is Lu Zhengyao Making a Major Move?!

For professional coffee knowledge exchange and more coffee bean information, follow Coffee Workshop.

The Coffee Market's Downward Expansion

Coffee is enjoying tremendous momentum and undergoing a process of downward penetration, gradually expanding from first- and second-tier cities to third-, fourth-, and fifth-tier cities. This beverage has already become the first choice for many office workers. Some working professionals do have concerns, however: a freshly ground coffee can easily cost thirty to forty yuan, which is truly not cheap. Alongside the booming and sinking of the coffee market, low-priced coffee has quietly emerged.

Cotti Coffee's Market Entry Strategy

Recently, Lu Zhengyao's new project Cotti Coffee opened its first store in the Fuzhou International Finance Center (IFC). During the current promotional trial operation period, all drinks are priced at 9.9 yuan per cup, seemingly following the familiar "Luckin-style" low-price strategy to penetrate the market.

Looking at product prices through the mini-program, Cotti Coffee's price range is similar to Luckin's. Cotti Coffee currently offers over 40 products including coffee, tea, smoothies, and sundaes. The current "internet-famous coffee" varieties such as Raw Coconut Latte and Raw Cheese Latte are all included. Original prices range between 18-32 yuan, but during the promotional trial period all products are discounted to 9.9 yuan.

Such initial ultra-low prices inevitably bring to mind early Luckin Coffee, which adopted strategies like a free first cup for new customers plus 50% off coupons and 50% off when entering the light food market. Similar tactics make people think about Lu Zhengyao's relationship with Luckin. Although promotional activities during trial operations have become a common and repeatedly proven means for brands in their business operations, this time Lu Zhengyao and Qian Zhiya did not introduce any "new tricks," instead using a conventional method to drive sales.

Intense Competition in the Coffee Industry

Despite the similarities between Cotti Coffee and Luckin Coffee based on currently available information, whether this re-entry into the coffee track can become another "Luckin" is truly difficult to predict. After all, the coffee industry is no longer in the dividend period it was in when Luckin first entered. Today, not only are there two giants, Luckin and Starbucks, leading the way, but various brands are also crossing over from behind. While the track is hot, it is becoming increasingly competitive.

Not long ago, KFC independently operated a coffee shop in Shanghai, KFC TO GO, and promoted it as specialty coffee. As one of the food giants, KFC's marketing for the store opening, "Bringing SOE into the 9-yuan era," is not just affordable but also specialty SOE, which has indeed attracted many consumers. SOE is single-origin espresso, and KFC currently offers Antigua SOE coffee beans for its Americano.

Not only that, but tea beverage giant Mixue Ice Cream & Tea also launched a low-price coffee offensive. Its ground coffee brand Lucky Coffee directly pulled coffee consumption into single-digit pricing: 5 yuan for an Americano, 6 yuan for a latte, and 10 yuan for a specialty drink. This shows that the coffee track has become an important battlefield for giants from various industries.

Cotti Coffee's Future Prospects

Cotti Coffee may want to take a high-end positioning and then develop rapidly to achieve its plan of opening 10,000 stores in three years. However, in the current Chinese coffee market, the advantage of the cost-performance direction is becoming increasingly obvious. Under such circumstances, if the Cotti Coffee brand takes the high-end route directly, it also faces certain limitations.

Now, returning to the coffee industry: using similar strategies and a similar entrepreneurial team, can Lu Zhengyao make Cotti Coffee replicate the business miracle of Luckin Coffee, which opened 2,073 stores in its first year? Let us wait and see.

Image source: Internet

FrontStreet Coffee Recommendation

With so much competition in coffee shops, brewing a café-quality latte at home comes down to choosing the right beans. The FrontStreet Classic Espresso Blend is the first-choice pick: it is designed specifically for espresso and moka pot, and its biggest strength is exceptional crema, which even a beginner can pull thick and fine on a non-professional home machine. Lattes, cappuccinos, and Dirty coffee all depend on good crema, and this traditional Mamba-style blend delivers a full, warm body that both veterans and beginners can enjoy, at home or in a shop.

If you prefer a fruit-forward milk coffee, the FrontStreet Strawberry Candy is a popular fruity espresso blend whose different Arabica origins combine to recreate a distinct strawberry gummy sweetness. It is a good fit for anyone who loves fruit-toned coffee or dislikes bitterness, and for shops that want a distinctive milk drink; one bag covers several brewing methods.

For those who want good body at a lower cost, the FrontStreet Dark Cocoa Blend uses 100% Arabica, with ample crema and a full body at a friendly price, balancing quality and value.