Smoke Rising? Lu Zhengyao Brings Cotti Coffee to Shanghai!

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Lu Zhengyao Returns to Coffee Industry with New Brand Cotti Coffee

When it comes to the chain coffee brand Luckin Coffee, Lu Zhengyao is an indispensable and forever unavoidable important figure. These two names, once deeply intertwined but eventually parted ways, have reappeared in the same arena after two years.

Recently, Cotti Coffee, a new coffee brand created by Luckin Coffee's founder and former core team, opened its first Shanghai store at Tianhui HQ (formerly Sky SOHO). Nearly all chain coffee brands in Shanghai have opened stores in this building. Starbucks, Luckin, and Manner have all opened more than one store, and previously, Three Cubic Coffee also opened its first Shanghai store here.

According to public reports, last month Cotti Coffee successively registered and established in multiple locations including Beijing, Changsha, Zhengzhou, and Hainan. A few days earlier, a Cotti Coffee insider told media that "Cotti has internally adjusted its 10,000-store target to before June 30, 2023, and is even offering salaries double Luckin's to crazily poach people from the old team." A competition in the coffee industry may begin to accelerate as pandemic control measures diminish.

According to media reports, when Cotti was asked "Why did you choose to open a store here?" a Cotti Coffee staff member replied: "Offices are currently the largest application scenario for coffee products. Tianhui HQ has a dense office population and a concentration of coffee brands, which is beneficial for brand promotion." Indeed, in such a market, major chain brands all want to be the first to establish their presence.

According to understanding, at this store, you can not only buy coffee but also different limited drinks, such as Messi's favorite yerba mate "Lemon Yerba Mate" and "Yerba Mate Cold Brew Coffee," of course, there are also Argentine series "Pampas Blue Raw Cheese Dirty" that other stores have....

It is worth noting that Luckin's hit drinks such as Raw Coconut Latte are also sold at Cotti Coffee, and currently all products are priced between 9.9 yuan and 18.9 yuan. Cotti Coffee's positioning has never been just "another" coffee shop. The brand's business scope covers coffee, baking, light meals, and bars.

Rapid Expansion and Ambitious Goals

After opening its first Fuzhou store on October 22 this year, from the current statistics of Cotti Coffee's ordering mini-program, the brand has quietly entered more than 40 cities. Between November 15-25, Cotti Coffee also opened 12 stores at a pace of "ten cities in ten days," rapidly launching a nationwide layout.

After opening its first store in October this year, Cotti Coffee boldly proposed a plan to open 10,000 stores in three years. While the "three-year, ten-thousand-store" plan is still shocking, there are reports that "Cotti has internally adjusted its 10,000-store target to before June 30 next year."

Lu Zhengyao, returning to his old trade, is running Cotti Coffee with a "money-burning" approach. His bold moves are not only reflected in the store opening speed that surpasses Luckin's early stage. In less than two months, Cotti Coffee has completed brand naming, supply chain operations, structure construction, and core personnel configuration, including many veterans who once fought alongside him, while also continuously offering high salaries to poach people and expand the team.

Business Model and Industry Impact

The difference between Lu Zhengyao's Cotti Coffee and Luckin Coffee is that Cotti Coffee did not indicate an open franchise model during the investment process, but instead called it a "fully managed joint operation model," and partners are also called "joint operators." However, according to reports by Times Finance and Economics, some professional analysts believe that its joint operation model is no different from the franchise model. Many chain brands avoid mentioning the word "franchise" mainly to avoid legal and regulatory risks.

Cotti has been established for less than two months. Lu Zhengyao's rapid comeback after Luckin's financial fraud case shows the huge attraction of the coffee industry to him. So, facing such a large-scale layout advancement, who feels the greatest chill this winter - Starbucks or Luckin?

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