Introduction:Cotti Coffee, a new brand launched by Lu Zhengyao along with the former core team of Luckin Coffee, has officially entered the Shanghai Hongqiao business district, going head-to-head with competitors such as Starbucks and Luckin. With an aggressive expansion strategy through a fully directly managed joint-operation model, Cotti Coffee aims to open 10,000 stores within three years, and is directly targeting the market with consumer-friendly prices ranging from 9.9 to 18.9 RMB. This article delves into its expansion strategy, product positioning, and potential impact on existing coffee brands.
Since leaving Luckin, Lu Zhengyao has once again taken on the role of founder, leading the original core team to launch the brand-new coffee brand "Cotti Coffee," and chose to open its first store at Tianhui HQ (formerly known as Lingshui SOHO) in Shanghai. This area is home to multiple well-known chain coffee brands, including Starbucks, Luckin, and Manner, and even earlier, Sanlifang Coffee also set up its first Shanghai store here, indicating fierce competition and huge consumption potential in the region.
It is understood that within the past few months, Cotti Coffee has rapidly completed brand registrations in cities such as Beijing, Changsha, Zhengzhou, and Hainan, and is accelerating its expansion through a "fully directly managed joint-operation model." Although termed a joint operation, this model is essentially similar to traditional franchising, recruiting former members of the Luckin team with high salaries, and actively expanding partner stores. Internal sources indicate that Cotti is attracting talent with salaries more than double those of Luckin, showcasing strong market ambitions.
The pace of Cotti Coffee's expansion is astonishing. Since opening its first store in Fuzhou on October 22, it has entered over 40 cities in just over a month. Especially between November 15 and 25 — within ten days — it opened 12 stores in a row, achieving a rapid layout of "ten cities in ten days." Such expansion speed inevitably draws comparisons to Luckin’s rise in its early days.
In terms of product strategy, Cotti Coffee not only offers classic coffee items such as Luckin’s best-selling Coconut Latte, but also introduces limited-edition yerba mate series, including “Lemon Yerba Mate” and “Yerba Mate Iced Coffee,” as well as Argentine-style specialty drinks such as “Pampas Blue Fresh Cheese Dirty.” The price range is set between 9.9 and 18.9 RMB, clearly targeting the mass market and directly competing with Luckin’s hit products.
Notably, Cotti Coffee’s positioning is not that of a simple coffee shop. Its business scope includes coffee, baked goods, light meals, and even bars, demonstrating ambitions for diversified operations. The first Shanghai store is located at Tianhui HQ, an area densely populated with office buildings. According to the brand, this choice is based on the consideration that office settings are a primary coffee consumption venue, which helps enhance brand visibility and sales performance.
Cotti Coffee set an ambitious goal of “10,000 stores in three years” shortly after its founding, and according to the latest news, this target has been adjusted internally to be achieved by June 30, 2023, showing its determination to seize market share quickly. This strategy not only puts pressure on Starbucks, but also presents a direct challenge to Luckin, which currently holds the market lead.
Lu Zhengyao’s comeback this time adopts a “money-burning” approach characterized by high capital investment and rapid expansion. Not only has Cotti surpassed Luckin’s initial performance in terms of store opening speed, but it also shows extremely high execution efficiency in brand structure, supply chain, and team building. Although Cotti officially claims to use a joint-operation model, industry experts analyze that this model is essentially similar to a franchise system, with the main difference being the avoidance of legal risks.
As pandemic control measures gradually ease, the overall coffee market is welcoming a new wave of competitive momentum. The rapid rise of Cotti Coffee not only reflects Lu Zhengyao’s precise grasp of market timing, but also heralds more intense market competition for Starbucks and Luckin in the future. Consumers may benefit from this competition by enjoying a more diverse range of coffee options at more affordable prices.
The above content is compiled by CoffeeHunters, a coffee news website.
