Cotti Coffee

Jenny Qian and Charles Lu, launched a direct competitor to the company they built and lost. An app based 'new retail tech' company. They focus on; micro-format stores, app-first, delivery-heavy and aggressive subsidies. Cotti scaled to over 10,000 stores in under two years, faster than any coffee chain in history including Luckin. They sold coffee at 9.9 RMB, roughly $1.40, directly triggering the Chinese coffee price war. With no annual report, no SEC filing, no disclosed P&L. It's hard to find what Cotti lost on the price war but what is known is: Cotti's average daily cup volume per store dropped to 150–160 cups at the end of 2023 (well below the 300–400 cups needed for a franchise store to break even at ¥9.9 pricing.) That means the majority of Cotti franchisees were operating at a cash loss throughout 2023. The price war wasn't all bad: It normalised daily coffee consumption for a new demographic who would've never paid the Starbucks premium in China. It converted tea drinkers into coffee drinkers and drove a new behavioural shift in the consumer economy- Leading to a greater market for the industry to sell to. Cotti has 18,000 stores, no public financials, a founder with a $180M SEC settlement on his record, and with a 50,000-store target by 2025 it missed by 35,000. Whether it survives depends entirely on whether Lu can find institutional capital willing to back him a second time. On current evidence, the answer is no.