According to a report by the Southern Metropolis Daily, on February 13, Cotti Coffee announced a comprehensive upgrade of its "Within Reach" plan, launching a convenience store model to enter the convenience retail industry. The upgraded store formats will include coffee shops, convenience stores, and shop-in-shops, aiming to maximize store efficiency and increase revenue. Meanwhile, the company maintained its target of having 50,000 store terminals by the end of 2025.

In recent years, Cotti Coffee has been a "dark horse" in the scale war of new-style tea drinks. It not only introduced a low price of 9.9 yuan but also earned the nickname "store-opening maniac" in the industry. Cotti Coffee ambitiously claimed to make its presence within 100 meters of every consumer, striving to dominate all major consumer venues. Previously, Cotti Coffee had launched a shop-in-shop model, widely embedding itself into all coffee-related business formats. Whether it was fast-food restaurants, convenience stores, gyms, or fried chicken stalls, as long as there was space for a few coffee machines and ice-making machines, a Cotti Coffee store could be opened at a cost of 30,000 yuan. This shop-in-shop model significantly reduced the cost of opening Cotti Coffee stores, which indeed led to a rapid expansion of its store network in a short period. However, the model was discontinued after only seven months. The shop-in-shop model received numerous complaints from consumers. Since it relied on other brands' stores, many shop-in-shops were extremely small in size and offered limited coffee varieties. Some stores were even located in obscure corners, giving the impression of being unlicensed or unclean. Consumers questioned the hygiene of these stores, arguing that this approach not only degraded service quality but also tarnished Cotti Coffee's brand image.

Cotti Coffee's aggressive store expansion strategy reveals its current anxiety. The competition in China's ready-made coffee industry is becoming increasingly fierce. According to data from iResearch, the market size of China's ready-made coffee industry exceeded 200 billion yuan in 2023. However, the industry concentration continues to rise, with leading brands like Luckin Coffee and Starbucks occupying nearly 60% of the market share. As a latecomer, Cotti Coffee needs to quickly expand its store network to achieve economies of scale, reduce costs, enhance its supply chain bargaining power, and capture market gaps. Although Codi Coffee has rapidly expanded to 7,000 stores through its low-price strategy, the price war places high demands on the profitability and cost-bearing capacity of individual stores. Selling at a low price means higher sales volume is needed to break even, making the scale war an inevitable battle for Cotti Coffee.

Unlike the parasitic shop-in-shop model, Cotti Coffee has chosen to open its own stores this time. Li Yingbo, Chief Strategy Officer of Cotti Coffee, said that convenience stores, as a major format of offline retail, are an important channel to meet users' immediate needs. Coffee, as a daily necessity, has a high-frequency and rigid demand attribute, which makes it a natural fit for the convenience store scene. In addition to selling Cotti Coffee's coffee and freshly made beverages, the Cotti Coffee convenience stores will introduce popular diversion categories such as ice cream, freshly made Western-style custard tarts, and Western-style sausages. Moreover, the convenience stores will also sell regular hot food products found in convenience stores, including Chinese pastries and bento boxes. The convenience store model can quickly cover more scenarios (such as office buildings and communities) and create more new "coffee+" consumption scenarios.

On February 10, Heytea released an internal company-wide email titled "Not Participating in the Numbers Game and Scale Involution, Returning to Users and Brand," calling for an end to the scale war in the new-style tea drink industry. Unlike Heytea, which has already accumulated a certain market presence and is positioned in the high-end market, high cost-effectiveness and convenience remain Cotti Coffee's key competitive advantages. For now, Cotti Coffee's goal for this year is still to open more stores. However, what kind of store format to open may be the strategic focus that Cotti Coffee needs to consider next. The Food Exhibition, as an important platform for industry exchange, may provide Cotti Coffee with new ideas and directions, helping it find a more suitable store model and development path in the fierce market competition.

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Source: iiMedia Network

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