The China coffee war is intensifying, with delivery platform subsidies pushing prices to extremes, enabling coffees for less than ¥3 RMB.
Platforms like JD Delivery are offering significant subsidies on coffee and tea to rapidly gain users and traffic, driving a new phase of price competition.
For brands like Cotti Coffee (Kùdí Kāfēi 库迪咖啡), participating in low-price subsidies is seen not just as “burning money” but as a necessary strategy to achieve the sales volume needed for store break-even and market entry.
Even premium brands are offering discounts through platform subsidies, while the growing freshly brewed coffee market, expected to reach 44.6% of the total market in 2024, shows high growth potential despite the price war.
While subsidies drive volume, brands face challenges regarding supply chain, store efficiency, and product quality; experts predict a “survival of the fittest” and industry consolidation.
The China coffee war is boiling over, and delivery subsidies are the new secret ingredient, pushing prices to unbelievable lows – think a freshly brewed Americano for less than ¥3 RMB!
It’s a wild time for coffee lovers and a nail-biter for brands.
An Orange C Americano showing up at your door for just ¥2.68 RMB ($0.37 USD)?
This isn’t a typo.
What was once a special deal for some ready-to-drink bottled coffees is now the jaw-dropping price you might find on the order page of Cotti Coffee (Kùdí Kāfēi 库迪咖啡).
It seems the age of “coffee freedom” has hit China harder and faster than anyone expected.
Let’s rewind to June 3rd, the first workday after the Dragon Boat Festival holiday.
Around 2:30 PM, a reporter from National Business Daily (Měirì Jīngjì Xīnwén 每日经济新闻) checked out a Cotti Coffee spot in Beijing’s bustling Chaoyang District.
Here’s the deal: on Cotti’s own mini-program, a coffee was listed at ¥7.9 RMB ($1.09 USD).
But hop over to the JD (Jīngdōng 京东) Delivery platform, and that price could plummet to ¥1.68 RMB ($0.23 USD).
Factor in packaging fees, and you’re still looking at a cup of coffee for less than ¥3 RMB ($0.41 USD).
A Cotti Coffee store. Image source: National Business Daily reporter Wang Ziwei photoA store staffer, chatting with the reporter (who was posing as a customer), spilled some pretty interesting beans.
By that afternoon, JD Delivery orders had already rocketed past 550 for the day.
That’s nearly double the volume compared to mid-May during the same hours.
And by 3 PM? Those JD Delivery orders had topped 600.
This surge isn’t just a random blip.
Platforms like JD Delivery are jumping into the fray, throwing down significant subsidies to grab that sweet, high-frequency traffic.
Coffee and tea, it turns out, are the new “killer apps” for these platforms fighting for users, sparking a fresh round in the ongoing coffee price wars.
But as prices keep hitting new lows, you’ve got to wonder:
Once we’re all used to these subsidy-fueled cheap coffees, will anyone be willing to pay “original prices” again?
Are these heavy subsidies just a flash in the pan for brands, or can they lead to sustained business growth?
Order Volume Increase at a Beijing Cotti Coffee Store on JD Delivery (June 3rd)
By 2:30 PM: Over 550 orders
Compared to mid-May (same hours): Nearly double the volume
By 3:00 PM: Topped 600 orders
Less Than ¥3 for Coffee? How Delivery Platform Battles Fueled Cotti’s “Massive Traffic”
“The absolute lowest? After a bank card discount, my coffee was ¥1.48 RMB ($0.20 USD) delivered.”
That’s Ms. Mei (a pseudonym), sharing her order screenshot with the National Business Daily reporter.
An incredibly cheap coffee order. Image source: Provided by intervieweeMs. Mei is a self-confessed coffee enthusiast.
She used to be a loyal fan of brands like Saturnbird Coffee (Sāndùn Bàn 三顿半), finding it more budget-friendly to brew her own.
Sometimes, for a change, she’d get coffee delivered, which usually cost her between ¥10 and ¥30 RMB ($1.38 and $4.14 USD) per cup – a bit steep.
But then JD Delivery started “spending money” to subsidize coffee lovers like her.
Naturally, Ms. Mei quickly became a regular at Cotti Coffee.
“Before, Cotti plus the delivery fee was over ¥10 RMB ($1.38 USD), so I might have looked at other brands,” Ms. Mei explained.
“Now, at ¥1.68 RMB ($0.23 USD)? There’s nothing to even think about.”
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Ms. Mei’s Cotti Coffee order history on JD Delivery. Image source: Provided by intervieweeBack at that Cotti store near an office building in Beijing’s Chaoyang District, the scene was chaotic (in a good way for sales, at least).
The order counter was piled high with delivery slips, all waiting for JD Delivery riders.
Two staff members were hustling: one packing orders and taking new ones, the other non-stop making drinks.
According to the staff, ever since JD Delivery rolled out its subsidies, Cotti’s order volume has skyrocketed.
This particular store runs from 7:30 AM to 8:00 PM.
During the morning rush on June 3rd, they needed three staff members just to keep up.
And the numbers back it up: data from the JD Delivery platform shows this Cotti store pulls in over 3,000 orders a month.
Interestingly, the staff mentioned that offering these super low-priced coffees wasn’t a top-down mandate from the platform or Cotti headquarters.
Each store apparently had the freedom to choose.
While Cotti’s own mini-program still showed ¥7.9 RMB ($1.09 USD), on JD Delivery, the coffee plus packaging was just ¥2.68 RMB ($0.37 USD).
The store staff even suggested customers could order via the delivery platform and just add a note: “self-pickup, no delivery rider needed.” Clever!So, who’s footing the bill for these crazy-low prices?
Industry insiders told the National Business Daily reporter that this coffee low-price war isn’t really being driven by the coffee brands themselves.
It’s the delivery platforms.
JD Delivery, being a newer player in this space, has acted like a 鲶鱼 (niányú – catfish) – stirring up the waters and intensifying delivery subsidies.
The good news for brands? Insiders say they generally don’t lose money because the platform subsidies cover most of the cost.
So, for coffee brands and their franchisees, jumping into this subsidy war is a win-win, right? More volume, platform-covered discounts… what’s not to like?
And it’s not just Cotti.
A quick search in the “Milk Tea Coffee” section on JD Delivery reveals many coffee and milk tea brands are deep in the subsidy game.
For instance:
A cup of Starbucks (Xīngbākè 星巴克) coffee can be found for around ¥25 RMB ($3.45 USD).
On other subsidized delivery platforms, even high-end coffee brands are slashing prices via platform help.
Brands like M Stand, COSTA, and Peet’s Coffee (Pèi Shī Kāfēi 培氏咖啡) are all in on the action.
These premium brands might offer discounts up to ¥13 RMB ($1.79 USD) on platforms like Taobao (Táobǎo 淘宝) Flash Sale.
Competition on Overdrive! Is Low-Price Coffee Just “Burning Money for Buzz”?
Let’s be real: price wars in China’s coffee scene are hardly new.
Remember Luckin Coffee (Ruìxìng Kāfēi 瑞幸咖啡)? They burst onto the scene and grabbed massive market share with their aggressive low prices, using coupons and offline promotions.
That initial “price war” even got Starbucks (Xīngbākè 星巴克) to roll out “buy one get one free” and “50% off” deals, pushing their usually ¥40 RMB ($5.52 USD) coffees down to the ¥15 to ¥20 RMB ($2.07 to $2.76 USD) range.
Things had cooled off a bit since last year, but JD’s entry into delivery has thrown gasoline on the fire, reigniting competition among platforms and heating up the entire tea and coffee sector.
Pan Helin (Pán Hélín 盘和林), a well-known economist and a member of the Expert Committee on Information and Communication Economics at the Ministry of Industry and Information Technology, shared some keen insights with National Business Daily.
He pointed out that the cost structure for coffee chains is a bit different from traditional restaurants.
Coffee stores need to expand their network, and crucially, each outlet must hit a certain sales volume threshold to spread out those fixed costs.
“Think about it,” Pan Helin explained. “If a store has a fixed investment of ¥200,000 RMB ($27,586 USD), selling 20,000 cups means each cup carries ¥10 RMB ($1.38 USD) of that fixed investment.
But if they sell 200,000 cups, each cup only bears ¥1 RMB ($0.14 USD) [in fixed investment].”
“Therefore,” Pan Helin emphasized, “participating in high subsidies on delivery platforms and selling coffee at low prices is not ‘burning money for buzz,’ but aiming for the sales volume required for a store to break even.”He believes that for new coffee brands, exchanging price for traffic is a necessary evil.
“Price wars might lead to ‘death,’ but without a price war, new brands won’t even get a chance to enter the market.” Oof, harsh but maybe true.Zhuang Shuai (Zhuāng Shuài 庄帅), a senior industry expert in New Retail and founder of Bailian Consulting, also weighed in.
“Brands like Cotti and Mixue Ice Cream & Tea (Mìxuě Bīngchéng 蜜雪冰城) were already positioned as low-price brands from the get-go,” Zhuang Shuai noted.
“Since their brand image is already about affordability, these super-low prices don’t have a dramatically negative impact on their perception.”
From the delivery platforms’ angle, high-frequency items like tea and coffee are gold.
They can quickly expand their business reach nationwide using these popular products.
And for brands like Cotti, this offers a golden ticket to capture market share at a lower acquisition cost, thanks to platform subsidies.
The market data definitely shows there’s something to fight for.
Freshly brewed coffee’s slice of the overall coffee market pie keeps growing:
It accounted for 40.2% in 2023.
It’s estimated to reach 44.6% in 2024.
Among all freshly prepared beverages, freshly brewed coffee boasts the fastest growth rate.
A research report from Zheshang Securities (Zhèshāng Zhèngquàn 浙商证券) published in March 2025 (note: this future date is from the original text, likely referring to a forecast *for* 2025 published in March *of a previous year*, or a typo in the source) predicts that the Compound Annual Growth Rate (CAGR) for freshly brewed coffee will hit 18.5% from 2024 to 2028.
That outpaces freshly brewed tea (16.4%) and other freshly prepared beverages (13.5%).
Growth projections for beverage categories. Image source: Zheshang Securities report screenshotThis low-price frenzy and the traffic it generates have understandably caused some heartburn for other coffee brands.
During the Dragon Boat Festival holiday, some sharp-eyed consumers noticed Luckin Coffee (Ruìxìng Kāfēi 瑞幸咖啡) could be snagged for ¥6.9 RMB ($0.95 USD) a cup.
This was widely seen as Luckin dipping its toes back into the low-price competition, even though Luckin publicly stated it was just a holiday promotion and not a permanent price cut.
The market, however, read it as testing the waters.Adding to the drama, on the first workday after the holiday, Starbucks (Xīngbākè 星巴克) sent out a “Second Cup Half Price” text message to its registered members.
Coincidence? Probably not.
Freshly Brewed Coffee Market Percentage in China
Year
Market Percentage
2023
40.2%
2024 (Estimated)
44.6%
Selected Discounted Coffee Prices Observed
Cotti Coffee on JD Delivery: ¥1.68 RMB ($0.23 USD) (can be lower with bank card discounts, e.g., ¥1.48 RMB)
Cotti Coffee with packaging on JD Delivery: ¥2.68 RMB ($0.37 USD)
Starbucks (on platforms): Approx. ¥25 RMB ($3.45 USD)
Premium Brands (M Stand, COSTA, Peet’s) on platforms like Taobao Flash Sale: Up to ¥13 RMB ($1.79 USD) discount
In this price war where it feels like there’s “no lowest, only lower,” even bottled ready-to-drink (RTD) coffee is seeing sales spikes.
UCC Craftsman Series Sugar-Free Coffee (900ml) priced at ¥11.9 RMB ($1.64 USD) became the top repurchase item among sugar-free coffees on Freshippo (Hémǎ 盒马), holding the top spot for four straight days.
炭仌 (Tànbīng) coffee, at ¥9.9 RMB ($1.37 USD) a bottle, also cracked the top three on Sam’s Club’s new product list.
Freshippo is leaning into this trend, launching its own HPP Cold Brew Black Coffee.
Sumida River Coffee (Yútiánchuān 隅田川) has also jumped in with bottled Americano Black Coffee and Orange C Ice Americano, both priced around ¥10 RMB ($1.38 USD).
Popular bottled coffee offerings. Image source: Web screenshot
The Long Game: What Happens After the Subsidy Sugar Rush?
“In the short term, Cotti’s money-burning strategy relies not on cost control but on capital financing,” Pan Helin analyzed.
“But in the long run, once the market reaches the break-even scale, Cotti will inevitably have to return prices to normal.”
That’s the million-dollar (or perhaps, billion-yuan) question: can they transition users from ultra-low prices to sustainable ones?
However, price wars don’t magically create unlimited business opportunities without trade-offs.
When orders surge like this, brands face immense pressure on several fronts:
Supply chain: Can they keep up with demand for beans, milk, cups, etc.?
Store efficiency: Are staff and stores equipped to handle the flood of orders without compromising speed?
Product quality: Does quality suffer when speed and volume become the primary focus?
Indeed, reports have already surfaced of some stores experiencing issues like stockouts and incorrect deliveries.
“The coffee industry will inevitably undergo a survival of the fittest,” Pan Helin predicted.
“Because even if it’s cheap, consumers may not necessarily buy it if quality or service tanks. The industry will definitely see consolidation.”
Zhuang Shuai offers a nuanced perspective, believing this intense price war is mainly concentrated among coffee brands whose primary sales channels are delivery-focused and whose product positioning is already in the affordable or low-price segment.
“Coffee and tea brands aren’t just about the beverage itself; they also carry social and business attributes,” Zhuang Shuai stated.
“People are still willing to shell out a higher price for certain ‘scenarios’ or experiences.”
“Furthermore, future consumer needs will likely become more personalized and segmented, and new brands will emerge in this process to cater to those niches.”
So, while the current subsidy-driven frenzy is making headlines with sub-¥3 coffees, the long-term evolution of China’s coffee war will depend on more than just price.
It’s a high-stakes game of scale, efficiency, brand loyalty, and the ability to adapt to ever-changing consumer tastes in this incredibly dynamic China coffee market.
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