Former Luckin Coffee executives Charles Lu and Jenny Qian have launched a new café concept in response to the growing opportunities for coffee chains in China
Charles Lu (left) and Jenny Qian (right) at Luckin Coffee's Nasdaq listing in May 2019 | Photo credit: Nasdaq
Former Luckin Coffee executives Charles Lu and Jenny Qian have returned to the coffee industry with a new coffee shop brand.
Lu and Qian, formerly Chairman and CEO of China’s Luckin Coffee, first announced plans to launch Cotti Coffee in China in August 2022.
The first branch of Cotti Coffee, in the eastern city of Fuzhou, is offering a daytime menu of coffee, tea and smoothies, as well as lunchtime food and evening alcohol options.
Alongside the bricks-and-mortar store, Cotti Coffee will also use the Chinese mobile payment app WeChat to operate an ordering and delivery programme.
China is a significant growth market for international coffee chains and a new crop of domestic operators catering to growing consumer appetite for coffee and aspirational hospitality venues.
Outlet growth has increased significantly over the last year, despite China’s zero Covid policy and subsequent new lockdowns that have adversely impacted hospitality trade.
US coffee giant Starbucks reached 6,000 Chinese stores in September 2022 and Canada’s Tim Hortons opened its 500th Tims China store in October 2022.
Meanwhile, McDonald’s-owned café concept McCafé seeking to launch 1,000 new locations in China by the end of 2023, adding to its current 2,500 stores, and Chinese start-up coffee chain Be+Star Coffee, also referred to as Bixing Coffee, targeting 500 stores across the cities of Jiangsu, Zhejiang and Shanghai within three years.
Lu left Luckin Coffee after fabricated sales of more than $300m were revealed in April 2020. The company consequently replaced its senior management team in May 2020, dismissed Qian as CEO and delisted from the Nasdaq in June of the same year.
However, the company has experienced a reversal in fortunes in recent months. Luckin Coffee emerged from bankruptcy in April 2022, surpassed 7,100 stores in August 2022 and reported robust second quarter revenues of $493m.