In 2025, China’s ready-to-drink coffee market has reached a fever pitch. The core theme is “10,000-store expansion,” with top brands jostling for market share and mid-tier players carving out precise niches. The ongoing battle between scale, profitability, and differentiation continues to unfold.
With Luckin Coffee and Nowwa Coffee joining the “10,000-store club,” China’s coffee landscape is now dominated by four major players with over ten thousand outlets each: Luckin, Cotti Coffee, Luckin (Note: Refers to “幸运咖,” a distinct brand), and Nowwa. However, behind the impressive store counts, the realities for each brand vary significantly.
The Top-Tier Battle: The Dilemma Between Scale and Profit
Luckin Coffee maintains rapid growth, with Q3 2025 total net revenue reaching 15.287 billion CNY, a year-on-year increase of 50.2%. This is primarily driven by aggressive domestic and international store expansion. However, profitability concerns persist. Its Q3 net profit was 1.278 billion RMB, down 2% year-on-year. Soaring delivery costs and industry-wide price wars have trapped it in a cycle of “expansion at the expense of profit.” In a bid to accelerate an upmarket transformation, Luckin is reportedly, along with its investor Centurium Capital, considering a bid for Blue Bottle Coffee and evaluating a potential acquisition of %Arabica’s China operations. Such moves would allow a quick entry into the premium segment and boost brand value. Luckin has officially “declined to comment” on these rumors, leaving ample room for speculation.
Starbucks has regained growth momentum through localization strategies. Its China revenue for fiscal year 2025 was $3.105 billion USD, up 5% year-on-year, with Q4 revenue at $831.6 million USD, a 6% increase. Innovation in non-coffee beverages and the explosion of its “专星送” delivery service have contributed to two consecutive quarters of positive comparable store sales. Following its partnership with Boyu Capital, Starbucks aims to expand its China store count to 20,000 (2.5 times the current number), making its future performance highly anticipated.
Mid-Tier Breakthrough: Dark Horses Emerge in Differentiated Niches
While giants clash, mid-tier brands are breaking through by differentiation. After just three years, “比星咖啡” (Bixing Coffee) secured tens of millions in Series B funding from Shunwei Capital and Zhengxuan Capital. It avoids the 9.9 CNY price war, targeting the 15-20 CNY range instead. By focusing on creative specialty drinks and premium coffee in core locations like office buildings, it is steadily approaching a thousand stores.
Nowwa Coffee joined the 10,000-store club by pioneering a “Coffee + Convenience Store” partnership model. Its asset-light “small store + delivery” model allows break-even at just 150 cups sold daily. In 2025, its daily cup volume via convenience store channels surged by 210%. With a core average customer spending of 16.99 CNY, covering the 9.9-20 CNY range, and a differentiated “healthy coffee” label, it has successfully secured its market position.
2026 Outlook: The New Rules for Survival
Market data from 2025 confirms coffee has become a daily necessity for Chinese consumers. For brands, the era of wild growth is over. The key to survival now lies in balancing scale with profit, and steadfastly committing to innovation and quality. Top players must solve their profitability puzzle and balance premiumization with value. Smaller players must deepen their moats in specialized segments. The competition will only intensify in 2026. Only those who accurately identify demand and adhere to sound business fundamentals will navigate this landscape steadily and sustainably.