With expanding footprints, GoodMe and Lucky Cup are driving an affordable coffee surge, shaking up China’s beverage market.

China’s coffee competition is brewing with no signs of cooling, as affordable coffee chains keep contending to bolster their market share. Among these are stores run by GoodMe, with sources telling 36Kr that GoodMe’s coffee products are now available in over 2,000 of its stores nationwide—a jump from just 500 of them in September. For GoodMe, which runs close to 9,000 outlets, a second growth curve appears on the horizon.

Mixue Bingcheng’s coffee brand, Lucky Cup, isn’t far behind. On November 4, it launched its 1,000th store in Henan, a leap from 981 just two days prior. Luoyang alone saw 101 new stores by the end of October, a sign that Lucky Cup is gunning for dominance.

This quick growth mirrors Lucky Cup’s overarching strategy. According to Canyan Data, the brand opened 648 new stores in the last six months, an average of over 100 per month. Nationwide, Lucky Cup now operates 4,000 stores—about one-tenth of Mixue’s 38,000-store empire, which includes around 4,000 locations overseas.

Neither GoodMe nor Mixue initially set out to dominate the coffee market. Both brands began with affordable tea drinks in lower-tier markets, where GoodMe’s products typically fall in the RMB 15 (USD 2.1) range, while Mixue keeps prices below RMB 10 (USD 1.4)—a strategy both have carried over to coffee.

GoodMe’s coffee prices range from RMB 8–17 (USD 1.1–2.4), with most items priced between RMB 11–15 (USD 1.5–2.1). The brand uses Swiss-made Schaerer machines, the same as Luckin Coffee. Lucky Cup, however, is sticking to the budget-friendly RMB 5–10 (USD 0.7–1.4) range.

While the core battleground is being waged between Luckin and Cotti Coffee’s RMB 9.9 (USD 1.4) offerings, GoodMe and Mixue have chosen different paths, extending their reach on either side of the price spectrum.

Initially, Lucky Cup expanded in Henan and the central provinces before ramping up to national coverage. Henan’s recent milestone of 1,000 stores highlights the brand’s strategy: build strong local roots before broadening its footprint. According to Canyan Data, Luckin Coffee had 698 stores in Henan as of October 7.

Henan, with its high population and sizable economy, is an interesting base for Lucky Cup. Despite being the sixth largest province by GDP, it ranks only 25th in per capita GDP. In other words, it’s the perfect market for affordable coffee. Here, budget-conscious consumers are more than ready for a daily coffee ritual that doesn’t break the bank.

Yet, Lucky Cup’s rapid rise hasn’t been without hiccups. Canyan Data notes that the brand opened over 2,800 stores across 2022 and 2023, only to soon face a wave of closures, dialing back its store count to 3,000 by year’s end.

A source close to Lucky Cup said that one reason for the closures was Cotti’s aggressive entry with promotions as low as RMB 1 (USD 0.1) and RMB 8.8 (USD 1.2), which cut directly into Lucky Cup’s sales. A saturated market and the November low season further strained Lucky Cup, making last year’s end a particularly challenging period.

Lucky Cup regained its momentum this year, however, slowly returning to an expansion pace. Initially, the brand set a goal of 4,500 stores by year-end but revised that to 5,000 in a Q4 strategy meeting.

GoodMe’s trajectory has been different. While Mixue committed to coffee early on, GoodMe initially focused on expanding its store count, setting a 10,000-store target. That plan was eventually set aside, with the founder later stating that the brand would not be overly focused on reaching 10,000 locations.

Yet, with coffee rolling out across more stores, GoodMe’s approach has shifted from relentless expansion to increasing per-store revenue, driving coffee sales without additional rental costs. Heytea has similarly taken a more cautious stance, telling partners in a September letter that it would focus on thoughtful growth rather than rapid openings.

Coffee and tea, once separate markets, are now blending as brands introduce crossover drinks like milk tea lattes that drive fierce price competition. With the changing market environment, store expansion and product launches bring new uncertainties.

Even so, coffee’s appeal remains strong. Two brands have already reached the coveted 10,000-store mark: Luckin hit 20,000 stores in July, and Cotti hit 10,000 in October, setting a clear top tier. Among smaller chains, however, none have pulled far ahead, leaving ample room for Lucky Cup and GoodMe to make their mark.

Reflecting on this rapid scaling, a coffee industry entrepreneur told 36Kr that his first significant challenge was when his company scaled up to 400 coffee machines. “Management, supply chain, and R&D all struggled to keep up. But once we reached 1,000 machines, those issues eased.”

For GoodMe, limiting coffee to just 500 stores may have stifled its growth, reducing both advertising reach and its bargaining power with suppliers. The entrepreneur’s takeaway? Going big may be the right move for GoodMe.

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