In the competitive landscape of China’s coffee industry, Cotti Coffee has emerged as a formidable player, redefining the market with its aggressive pricing and rapid global expansion. Founded by former Luckin Coffee visionary Lu Zhengyao, Cotti has not only disrupted local competition but also set its sights on becoming a global powerhouse. This article delves into Cotti’s origin story, expansion strategy, competitive edge, and supply chain innovation, all while optimizing for SEO keywords like “Cotti Coffee founder story” and “Cotti Coffee global expansion 2025”.
1. Brand Background: Lu Zhengyao’s Resurgence
Lu Zhengyao, the mastermind behind Luckin Coffee’s meteoric rise and subsequent scandal, returned to the coffee scene in 2022 with Cotti Coffee . After Luckin’s 2020 financial fraud crisis, Lu was ousted, but he vowed to rebuild his empire. Cotti’s launch marked his comeback, leveraging the lessons from Luckin’s playbook while introducing a new strategy: 9.9 RMB ($1.38) coffee for all.
The 9.9 RMB Revolution
By slashing prices to under $1.50 per cup, Cotti targeted price-sensitive Chinese consumers, effectively undercutting Luckin’s similar promotions. This bold move not only attracted millions of new customers but also forced Luckin to retaliate with its own discounts, igniting a nationwide coffee price war .
Strategic Timing
Cotti’s 2022 debut coincided with China’s growing coffee culture, particularly among younger generations. By positioning itself as a “people’s coffee” brand, Cotti quickly gained traction, opening 7,000 stores globally by 2024 .
2. Global Expansion: From 28 Countries to 50,000 Stores
Cotti’s ambition extends far beyond China. Here’s a breakdown of its international journey:
2023: Rapid Market Penetration
- 28 Countries: Cotti entered markets like South Korea, Japan, Canada, Indonesia, and Thailand, leveraging partnerships and localized marketing .
- Strategic Partnerships: Sponsorships with the Argentine National Football Team and participation in global events boosted brand visibility .
2024: Flagship Stores in Sydney and Doha
- Sydney Launch: In February 2024, Cotti opened its first Australian store in Cabramatta, offering $3.9 AUD ($2.75) drinks and $2.5 AUD ($1.75) iced Americanos, attracting long queues and rave reviews .
- Doha’s Affordable Luxury: The Qatari store in Doha’s Pearl Island offered 10 QAR ($2.75) drinks in a market where coffee often costs $10+, positioning Cotti as a disruptor in the Middle East .
2025 Target: 50,000 Global Stores
Cotti aims to surpass Starbucks’ global footprint by 2025, with plans to dominate key markets like Europe and Southeast Asia. Its “three stores per block” strategy—opening multiple outlets in high-traffic areas—has already proven effective in China .
3. Differentiated Competition: Outpacing Luckin
Cotti’s rivalry with Luckin is not just a battle of prices; it’s a clash of strategies:
Aggressive Store Expansion
- Franchise Model: Cotti uses a full 联营 (joint operation) model, where franchisees pay lower upfront costs and receive higher profit shares compared to Luckin. This has fueled its rapid growth, with 6,800+ stores in 2024 .
- Flexible Store Formats: Cotti’s “Cotti Express” stores (6–12 sqm) and “store-in-store” partnerships with pharmacies, convenience stores, and even Huawei shops allow it to penetrate underserved areas .
Product Innovation
- Copycat Strategy: Cotti mirrors Luckin’s 爆款 (hit products), such as coconut lattes and limited-edition collaborations, but at a lower price. For example, when Luckin offered 9.9 RMB coffee, Cotti countered with 8.8 RMB .
- Localized Menus: In Australia, Cotti added iced matcha lattes and avocado toast to cater to regional tastes, while in the Middle East, it introduced cardamom-infused blends .
Marketing Warfare
Cotti’s social media campaigns, including referral programs and viral challenges, have helped it gain millions of followers. Its “Share and Drink Free” promotion in Sydney, where users earned free coffee for referrals, went viral on platforms like TikTok .
4. Supply Chain Advantage: The Backbone of Low Prices
Cotti’s Anhui Global Supply Chain Base is the cornerstone of its cost-effective strategy:
Vertical Integration
- Bean to Cup: The base processes 45,000 tons of coffee beans annually—China’s largest single roasting facility—and produces syrups, packaging, and even coffee machines in-house .
- Logistics Efficiency: By sourcing beans directly from Brazil and Vietnam and using automated packaging lines, Cotti cuts costs by 20% compared to competitors .
Global Reach
Cotti’s Wuhu Free Trade Zone facility handles international logistics, enabling seamless distribution to overseas markets. This infrastructure supports its global expansion while maintaining quality control .
6. Challenges and Future Outlook
While Cotti’s growth is impressive, it faces hurdles:
- Profitability: Despite claiming profitability in May 2024 , analysts 质疑 its sustainability due to heavy subsidies and high operational costs.
- Brand Reputation: Lu’s legal troubles (e.g., $26 million in unpaid debts ) and Cotti’s aggressive tactics have drawn criticism.
- Global Competition: In markets like Australia, Cotti competes with established players like Gloria Jean’s and local cafes, requiring localized strategies.
However, Cotti’s supply chain innovations and hyper-localized approach position it well for long-term success. As it gears toward 50,000 stores by 2025, the brand’s ability to balance affordability with quality will be key.
Conclusion: A New Era of Coffee Accessibility
Cotti Coffee’s rise symbolizes China’s evolving consumer landscape—where affordability, speed, and innovation reign supreme. By capitalizing on Lu Zhengyao’s expertise, disrupting pricing norms, and building a robust global infrastructure, Cotti has not only redefined the coffee industry but also set a blueprint for Chinese brands aiming to go global.
Ready to explore Cotti’s menu? Visit Cotti Coffee’s official website or follow their journey on Instagram. For more insights into China’s business ecosystem, check out our China Tech Hub. ☕
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