Price War Review
In early 2023, Cotti first launched “all 9.9 yuan” promotion, Luckin immediately responded with “9.9 yuan every week” strategy. Then second-tier brands followed, with Tims, Nomao, Lucky Cup all launching similar promotions.
Cost Structure Analysis
| Item | Cost (yuan/cup) |
|---|---|
| Coffee beans | 2-3 |
| Milk | 1-1.5 |
| Other ingredients | 0.5-1 |
| Packaging | 1-1.5 |
| Labor | 1.5-2 |
| Rent and utilities | 1-1.5 |
9.9 yuan is almost the industry’s recognized price floor.
Brand Strategy Analysis
Luckin Coffee
- Q1 2024 lost 65 million yuan due to continuous discounts
- Q2 2024 adjusted strategy: reduced coupons by 30%, changed to 3 days of 9.9 yuan per week
- 2025 further tightened: coverage reduced from 80% to 30%, introduced tiered pricing
Cotti Coffee
- Adheres to “trade loss for market” strategy
- October 2024 stores exceeded 10,000
- Franchise stores account for over 80%, per-cup subsidy up to 3 yuan
- Continuous losses raise sustainability concerns
Lucky Cup
- Leverages Mixue’s supply chain advantages
- June 2024 implemented “all 6.6 yuan” price limit
- Gross profit margin still maintains 35%, much higher than industry average
- Raw material procurement cost 30%+ lower than independent procurement
Premium Brand Responses
- Starbucks: Refused direct price cuts, used indirect promotions like delivery platform discounts and member benefits
- Tims: Mainstream “coffee + bagel” combo, but effect limited, continuous losses
Conclusion
Low-price wars are not a long-term solution; the industry has shifted from wild expansion to rational operation. Future competition focus will shift to product capability, operational efficiency, and user experience.