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

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The Coffee Market's Downward Expansion

Currently, coffee is experiencing tremendous momentum, 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. However, some working professionals have concerns – a freshly ground coffee can easily cost thirty to forty yuan, which is truly not cheap. Accompanying 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 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.

Through the mini-program, looking at product prices, Cotti Coffee's price range is similar to Luckin's. Currently, Cotti Coffee offers over 40 products including coffee, tea, smoothies, sundaes, and more. 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 discount-priced at 9.9 yuan.

Such initial ultra-low prices inevitably remind people of early Luckin Coffee, which adopted strategies like first cup free for new customers plus 50% off coupons, and 50% off for entering the light food market. Similar gameplay makes people think about his relationship with Luckin. Although promotional activities during trial operations have become common means for many brands during their business operations and have proven repeatedly effective, this time Lu Zhengyao and Qian Zhiya didn't introduce any "new tricks" but instead used a conventional method for 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" remains truly difficult to predict. After all, the coffee industry is no longer in the industry dividend period 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's becoming increasingly competitive.

Just a while 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 promotion for this store opening – Bringing SOE into the 9-yuan era! This 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 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 a single-digit pricing level – 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 route positioning and then develop rapidly to achieve the 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 directly takes the high-end route, it also has 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's wait and see.

Image source: Internet

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