GoodMe And Lucky Cup Fuel China’s Affordable Coffee Boom Amid Rising Competition – CoffeeTalk

China’s coffee market is dominated by affordable chains like GoodMe and Mixue Bingcheng, with both brands aiming to expand their market share. GoodMe has over 2,000 stores nationwide, while Mixue Bingcheng’s Lucky Cup has launched its 1,000th store in Henan. Both brands initially focused on affordable tea drinks in lower-tier markets, where GoodMe’s products typically fall in the RMB 15 (USD 2.1) range. However, they have since adopted a different strategy, extending their reach on either side of the price spectrum.

Lucky Cup, which initially expanded in Henan and the central provinces before ramping up to national coverage, has faced closures due to aggressive entry from Cotti Coffee, which cut directly into sales. The saturated market and November low season further strained Lucky Cup, making last year’s end particularly challenging. However, Lucky Cup has regained momentum this year, slowly returning to an expansion pace.

GoodMe’s trajectory has been different. While Mixue committed to coffee early on, GoodMe initially focused on expanding its store count, setting a 10,000-store target. However, with coffee rolling out across more stores, GoodMe’s approach has shifted from relentless expansion to increasing per-store revenue, driving coffee sales without additional rental costs. Heytea has taken a more cautious stance, focusing on thoughtful growth rather than rapid openings.

Coffee and tea, once separate markets, are now blending as brands introduce crossover drinks like milk tea lattes that drive fierce price competition. With the changing market environment, store expansion and product launches bring new uncertainties. Even so, coffee’s appeal remains strong. Two brands have already reached the coveted 10,000-store mark: Luckin hit 20,000 stores in July and Cotti hit 10,000 in October, setting a clear top tier. Among smaller chains, none have pulled far ahead, leaving ample room for Lucky Cup and GoodMe to make their mark.

A coffee industry entrepreneur told 36Kr that his first significant challenge was when his company scaled up to 400 coffee machines. However, once they reached 1,000 machines, those issues eased. For GoodMe, limiting coffee to just 500 stores may have stifled its growth, reducing both advertising reach and its bargaining power with suppliers. The entrepreneur’s takeaway is going big may be the right move for GoodMe.

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