Introduction:2016 was the first year in the 17-year history of Coffee Wings that it recorded a loss, but President Yin Feng believed this was a necessary sacrifice to pave the way for the future. By expanding from traditional direct-operated and franchised models into the supply chain and smart coffee machine sectors, how is she achieving her goal of reaching a market value of 2 billion or even 10 billion RMB through a "horizontal and vertical" strategy? This article delves into Yin Feng's business mindset and the growth potential of China’s coffee market.
In 2016, Coffee Wings released its first loss-making financial report since its founding 17 years ago. However, President Yin Feng stated that this was an outcome she had long anticipated. She believes the loss is a short-term cost incurred for the layout and construction of new business areas, all aimed at enabling the company to run faster and farther in the future.
Despite the poor financial figures, the board of directors of Coffee Wings remains star-studded, including well-known host He Jiong, 58.com founder Yao Jinbo, and Jumei Youpin chairman Chen Ou. Yin Feng pointed out that after the annual report was released, the board members expressed understanding and encouraged her to focus on long-term development. “There’s no need to overly concern ourselves with external doubts; what matters is laying a solid foundation and looking ahead.”
The “future” in Yin Feng’s vision is to transform Coffee Wings from a traditional coffee chain brand into a comprehensive coffee ecosystem platform encompassing multiple business lines. She admitted that although listing on the New Third Board put short-term pressure on the company, becoming a public company is a crucial step toward realizing her coffee ambitions.
Looking back at the time of listing, Yin Feng began considering how to give the enterprise more diverse vitality. Observing international food giants like Starbucks and domestic listed companies such as 58.com and Jumei Youpin, she realized their continuous growth hinged on expanding new businesses around their core operations. As a result, she planned two “wings” for Coffee Wings—its supply chain and urban smart coffee machines.
Before 2016, Coffee Wings’ main revenue came from two traditional businesses: sales from offline direct-operated stores and franchise authorization income from franchisees. While these two streams provided stable cash flow, their growth potential was limited. To break the bottleneck, Yin Feng led her team to develop the two new business lines: the supply chain and smart coffee machines.
The supply chain business involves raw material procurement, product R&D, factory quality control, logistics and distribution, and warehouse management—a highly specialized and complex undertaking. From 2016 to the first half of 2017, Yin Feng and her team focused on team building and process optimization. She emphasized that this would become an important source of profit growth for the company in the future.
The other wing—the urban smart coffee machine—is a project Yin Feng had been conceptualizing for many years. She hopes to use these unmanned retail terminals to transform coffee machines into lightweight “urban coffee shops.” Each machine occupies just 1.2 square meters, but in addition to freshly ground coffee, it can also offer a variety of options such as iced fruit drinks and milk cocoa. In the future, it could even expand into the sale of more peripheral products, becoming a key C-end traffic entry point.
In early 2016, Coffee Wings collaborated with an external tech team to develop a concept smart coffee machine with entertainment features. It had an eye-catching design and innovative functions, but was put on hold due to stability issues that hadn’t yet met commercial application standards. The model currently being promoted in the market is a customized machine using German technology,with 70% of its components imported from Europe and America,offering higher stability and market adaptability.
In terms of market strategy, Yin Feng proposed a “horizontal and vertical” approach. The “vertical” refers to vertically integrating the coffee industry chain—from offline chain stores, to lightweight urban smart coffee machines, to ready-to-drink coffee products that will eventually enter supermarkets and e-commerce platforms—forming a multi-layered sales network.
The “horizontal” represents brand management output. With 17 years of operational experience, Coffee Wings has established a complete brand management system, including eight operational systems and five management manuals, along with a professional and highly career-oriented operations team. Among them, Yin Feng particularly emphasized its data-driven intelligent management SaaS system, which has enabled remote information-based management of stores nationwide. This system could also be output to other lightly operated coffee brands in the future, helping incubate more sub-brands that meet market demand.
Yin Feng is full of confidence in the long-term prospects of China’s coffee market. According to data from the London-based International Coffee Organization, the average annual coffee consumption per capita in China is only four cups, and even in first-tier cities it does not exceed 20 cups—far below the 400 cups in the U.S., 200 cups in Japan, and 140 cups in South Korea. However, China’s coffee market is growing rapidly atan annual rate of 15%,and it is estimated that by 2020, if each person drinks one cup of coffee per day, the coffee bean market alone will reach a scale of 50 billion USD, with the entire industry chain surpassing 100 billion USD.
She believes that as the post-85s, post-90s, and post-00s gradually become the main consumers, this group, raised in an environment of flattened information, will bring new opportunities to coffee culture. Compared to the more conservative strategies of the past, Yin Feng says that now is the time for Coffee Wings to spread its wings.
Facing the future, Yin Feng has set clear goals: first to achieve a 2-billion-RMB market value, then aim for 10 billion. She humbly states that she is merely a dream chaser who persists in pursuing her dreams, relying on a deep understanding of the market and unwavering resilience. She believes Coffee Wings understands the needs of Chinese consumers better than international brands—especially in second-, third-, and fourth-tier cities, where residents have more time for social enjoyment, making it the perfect setting for developing Coffee Wings’ “third space.”
She also emphasizes that the company will not abandon first-tier markets. Through lightly operated product lines such as the “High-Energy Series,” “Little Wing Series,” and “Free Wing Smart Coffee Machines,” it will gradually expand into core cities like Beijing, Shanghai, Guangzhou, and Shenzhen, executing a “rural encirclement of cities” strategy from lower-tier to first-tier cities.
Yin Feng admits that Starbucks is her role model. Although professionals often criticize Starbucks for not having the highest-grade coffee flavor, it has successfully shaped a young, internationalized coffee lifestyle. She hopes that in the future, China can also produce a great coffee brand like Starbucks, competing healthily with it to collectively elevate market standards, making coffee an indispensable part of urban life.
The above content is compiled by CoffeeHunters, a coffee news website.
