The archive · Consumer Apps · Strategic decision · 2022–2025
Cotti Coffee: 10,000 Stores in Two Years
Lu Zhengyao's new venture: 9.9-yuan coffee, no-franchise-fee joint operation, 10,000 stores in two years.
Cotti Coffee (库迪咖啡)
What the business is
Cotti Coffee (库迪咖啡) is an affordable freshly ground coffee chain founded in October 2022, rapidly expanding through 9.9-yuan promotions and joint operation (no franchise fee, service-fee commission), with stores across China's county-level cities and 28 overseas countries; from 2025 it has extended into the convenience-store format.
How it started
In October 2022, Lu Zhengyao (陆正耀), who had been expelled from Luckin Coffee's (瑞幸) board of directors due to financial fraud, officially announced the new project 'Cotti Coffee (库迪咖啡)' on WeChat Moments; former Luckin Coffee CEO Qian Zhiya (钱治亚) served as chairman and CEO, and the first store opened in Fuzhou (福州) on October 22. One month after opening, 9.9-yuan coffee ignited a price war; Cotti Coffee (库迪咖啡) positioned itself as affordable freshly ground coffee, and Lu Zhengyao had said China's coffee market can accommodate a third player, with a target of opening 10,000 stores in three years.
What happened
Cotti Coffee (库迪咖啡) opened about 6,000 stores in 10 months, setting the fastest expansion record in the industry; the 9.9-yuan promotion continued for a long time, and in May 2024 Chief Strategy Officer Li Yingbo (李颖波) announced that the subsidy policy would be extended until the end of 2026. On October 22, 2024, the first store's second anniversary, the world's 10,000th store opened in Doha, Qatar (卡塔尔多哈)—according to Zhumen Canyan (窄门餐眼) metrics, 7,412 stores were in China and more than 2,000 were overseas; the store count ranked fourth in the world, with business in 28 countries; the company said that in the past 5 months the positive cash-flow rate of stores had been stable at more than 97%, the cumulative two-year closure rate was 3.6%, and in May 2024 it announced full profitability. In February 2025, domestic stores exceeded 10,000 (10,045 according to Zhumen Canyan (窄门餐眼) metrics); in March it released a convenience-store format, adding ice cream and hot food, while maintaining the target of 50,000 store terminals by the end of 2025; as of November 13, 2025, Jihai (极海) brand monitoring data showed 15,791 stores nationwide.
No ending yet — it is still running.
Background
Cotti Coffee is Lu Zhengyao's second venture after Luckin. Launched October 2022, it replayed Luckin's low-price, capital-driven playbook. Opened 6,000 stores in 10 months, mostly in lower-tier cities.
Expansion used joint operation: no franchise fee, tiered commissions, low deposits, and store-in-store formats. By October 2024, 10,000 stores worldwide, with 97% positive cash flow and 3.6% closure rate.
From 2025, model shifted to convenience stores and store-in-store. But by November 2025, only 15,791 stores, missing 50,000 target. Rising costs and franchisee disputes cast doubt on profitability.
What has to be true
- 9.9-yuan coffee and no-franchise-fee joint operation lowered entry barriers, enabling rapid expansion.
- Light-asset model tied cash flow to franchisee entry and survival.
- Lower-tier markets were underserved, with 61.6% of stores in second-tier and below.
- The 50,000-store target failed; supply chain and franchisee issues exposed model limits.
What can be applied
The same playbook can recreate growth, but not profitability: expansion depends on franchisee capital; the 50,000-store boast stopped at 16,000.
Aftermath
As of November 2025, Cotti had 15,791 stores, far short of 50,000. It shifted to convenience-store formats, built a supply-chain base in Anhui, and launched new categories. Controversies: franchisee complaints, cost concerns, and ongoing 9.9-yuan war. IPO remains uncertain.
Sources
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