The convenience and value-focused coffee chain has emerged as another major competitor in the fast-growing Chinese branded café market, where Luckin Coffee and Starbucks are vying for dominance
Cotti Coffee seeks to attract customers via its value-focused coffee menu and conveniently located stores | Photo credit: Cotti Coffee
Cotti Coffee, launched in October 2022 by former Luckin Coffee executives Charles Lu and Jenny Qian, is in the midst of rapid expansion across China, according to Shanghai-based news agency Yicai Global.
According to the media outlet, Cotti Coffee has opened approximately 1,300 stores across 181 Chinese cities over the last five months, including opening 80 outlets in one three-day period.
Cotti Coffee has previously announced plans to reach 10,000 stores across China by the end of 2025.
Comparible to Luckin Coffee’s early rapid expansion, Cotti Coffee seeks to attract customers via its value-focused coffee menu and conveniently located stores, often near high footfall office districts in China’s largest cities.
The start-up is also leveraging influential partnerships to boost brand recognition, becoming the sponsor of the Argentinian men’s national football team in November 2022 and the title sponsor of the 2022 Chengdu Marathon.
Lu and Qian left Xiamen-based Luckin Coffee in 2020 following the discovery of fabricated sales in the region of $300m. The scandal forced the technology-focused chain to delist from the Nasdaq and file for bankruptcy.
Luckin Coffee has since achieved a significant reversal in fortunes. The company turned its first full-year profit in 2022, RMB 1.1bn ($167m), alongside sales of RMB 13.3bn ($1.9bn), 67% higher than in 2021.
Now led by CEO Jinyi Guo, Luckin Coffee is the largest coffee chain in China with over 8,200 outlets, notably more than the second largest operator Starbucks, which reported having 6,090 stores at the end of its first quarter.
China, which removed virtually all pandemic trading restrictions at the end of 2022, is a significant growth market for international and domestic coffee chains alike.
In September 2022, Starbucks announced plans to increase its store count in China by 50% to reach 9,000 outlets by 2025.
Tims China, the operator of Canadian coffee chain Tim Hortons across the country, opened its 600th store in January 2023 amid plans to reach 2,750 outlets by 2026, while McDonald’s-owned café concept McCafé is seeking to launch 1,000 new locations in China by the end of 2023, adding to its more than 2,500 stores.
World Coffee Portal research forecasts the total Chinese branded coffee shop market will exceed 36,000 outlets by 2025.