How Cotti Coffee Is Reshaping China's Cafe Price Floor – CoffeeTalk

Cotti Coffee, founded in 2022 by former leaders of Luckin Coffee, has rapidly expanded to 15,000 outlets worldwide, distinguishing itself in the competitive coffee market. Former Luckin executives Lu Zhengyao and Qian Zhiya introduced Cotti not simply as a sequel to Luckin but as a new venture with a focus on rapid growth in lower-tier cities and international markets, while maintaining a mobile-centric and delivery-oriented business model.

Central to Cotti’s branding strategy is its signature pricing of RMB 9.9 (approximately $1.40) for most drinks, which positions coffee as an affordable everyday item rather than a luxury. This pricing strategy, launched in mid-2023, contrasts with Luckin’s coupon-heavy promotions and aims to embed the ‘sub-10 RMB’ price point firmly in consumer minds. This tactic has not only transformed Cotti’s brand perception but has also influenced the broader market dynamics, prompting other brands to lower their prices as they react to Cotti’s aggressive pricing.

Cotti’s entry into the market coincided with a renewed subsidy war among delivery platforms including Meituan, Taobao, and JD.com, which offered significant discounts across the beverage sector. This influx of competition has intensified the polarization of the beverage market, with Cotti and other large chains catering to the demand for low-cost, high-frequency delivery drinks, while higher-priced specialty cafes aim to attract consumers through unique experiences and premium offerings.

Although Cotti’s strategy may echo Luckin’s rapid growth, its model is distinctly focused on sustaining low prices through scale and delivery efficiency, rather than initially attracting customers with promotional giveaways. As Cotti aims to maintain its RMB 9.9 pricing, its success will hinge on its ability to adapt as it further penetrates lower-tier cities and international markets. The broader impact of Cotti’s pricing strategy has set new expectations among consumers while challenging various operators within the coffee and beverage industries to navigate a landscape where affordability and speed have become paramount for survival.

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