Poaching Baristas, Snatching Franchisees... Lu Zhengyao Accused of Undermining Luckin Coffee

Recently, Time Finance reported that the "close-quarters battle" between Cotti Coffee, founded by Lu Zhengyao, and Luckin Coffee is becoming increasingly fierce, now extending to the competition for personnel.

According to the report, some potential merchants who originally intended to franchise with Luckin have accepted Lu Zhengyao's olive branch, attracted by the reputation of the "former Luckin founder" and favorable franchising policies, and have instead joined Cotti Coffee's camp.

At Cotti, references to the "former Luckin founder" are ubiquitous. This designation appears not only in the franchise recruitment proposal on their official website but also on promotional banners in stores, and can even be heard through megaphones during local promotions. Within Cotti, whether it's the founder, executives, franchisees, store managers, or baristas, all have connections to Luckin. After leaving Luckin, Lu Zhengyao first brought along his "disciple" Qian Zhiya, who became Cotti's CEO. He then poached several Luckin executives, including the team that developed Luckin's store monitoring system, to design a new system for Cotti.

Time Finance mentioned that in some coffee shop franchising groups, Cotti has become the most discussed brand, even appearing in conversations among Luckin franchisees. Some experienced potential franchisees who planned to join Luckin were deterred by Luckin's overly strict franchising requirements. Cotti claims not to charge franchise fees, instead operating under a joint management model that collects service fees from store operating profits, with a return on investment in as little as a month, branding it the "Coffee Dreamer" program. Compared to Luckin, Cotti appears to have a lower entry barrier, prompting some to switch to the new camp.

Additionally, Daily People Media published an article on March 16th reporting that a franchisee who had previously opened 7 Luckin branches also left Luckin at the end of last year, converting their stores to Cotti. Initially converting 3 stores, they continuously sought new locations and have now opened more. They also renamed their official social media accounts, including the "Linyi Luckin" Weibo, Xiaohongshu, and Douyin accounts with 121,000 followers to "Linyi Cotti," operating them as Cotti's official accounts.

Targeting Lower-Tier Cities

The article also interviewed a Cotti Coffee investment manager from a third-tier city, who revealed that Cotti's initial target market was small third and fourth-tier cities, which coincides with Luckin's current "sinking" strategy into county-level areas. Therefore, in the commercial districts of the same small city, Luckin and Cotti are inevitably headed for confrontation.

Not far from every newly opened Cotti store, there is already a Luckin location, with distances ranging up to approximately 100 meters, and some even located right next door. This investment manager stated: "Cotti is specifically targeting Luckin's customer flow. By selecting locations close by, surrounding them strategically, and far outnumbering them in quantity, the goal is to 'fight right alongside the competitor'."

According to Time Finance's report, in addition to franchisees, baristas are another group that Cotti seeks to recruit. Some baristas who previously worked at Luckin have been "poached" by Cotti due to limited advancement opportunities at Luckin, in order to obtain better compensation and positions. Cotti promised one barista a direct promotion to store manager. Additionally, Cotti informed her that she could refer former Luckin colleagues, stating that "anyone who joins will start as an assistant store manager." For example, at a Cotti Coffee store in Luozhuang District, Linyi, the new store manager was directly poached from the nearby Luckin store by the franchisee.

Motivation and Objectives

A Cotti expansion manager stated in an interview with Tech Planet that their main motivation for joining Cotti was "to prove ourselves." Meanwhile, a major Cotti franchisee repeatedly mentioned that his and his team's common goal is to "take down Luckin." Lu Zhengyao's desire for revenge is clearly evident this time.

As netizens have commented, Cotti's strategy is to capitalize on Luckin's popularity while grabbing Luckin's territory and business, and now they're also poaching Luckin's people.

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