Core Viewpoint - The article discusses the rapid expansion of the coffee brand Lucky Coffee, which has reached over 10,000 stores globally in just 10 months, becoming the third local coffee chain to join the "10,000-store club" after Luckin and Kudi [2][3]. Expansion and Market Position - Lucky Coffee's journey to 10,000 stores was not smooth, facing challenges due to unclear positioning in its early years. A significant turnaround occurred in 2020 when the general manager of Mixue Ice City, Zhang Hongfu, redefined the brand's strategy [3][4]. - The brand established a "high-quality and affordable" positioning, with prices set between 6-8 yuan, targeting lower-tier markets and student demographics. This strategy led to a rapid expansion, with 579 new stores added in 2022 [4]. - In 2023, the coffee industry faced intensified price wars, causing Lucky Coffee to lose its competitive edge temporarily. However, a promotional campaign in mid-2024 helped revive sales [5][6]. Cost Control and Franchise Model - Lucky Coffee's pricing strategy includes a cup of Americano priced at 6.9 yuan in first-tier cities, lower than discounted prices from competitors. The brand maintains a gross margin of 48% even at lower prices due to effective cost control [9]. - The company benefits from a robust supply chain, with coffee bean procurement costs significantly lower than the industry average. A 40 billion yuan procurement agreement with Brazil further strengthens its cost control [9][10]. - The franchise model is unique, with no revenue sharing from individual stores, reducing management costs for franchisees. The initial investment for a franchise is approximately 127,000 yuan, making it accessible for more entrepreneurs [10]. Market Challenges and Competition - As Lucky Coffee expands into first- and second-tier cities, it faces a different competitive landscape, with established players like Luckin holding a significant market share [14][16]. - The brand's perception as a "cheap coffee" option poses challenges in brand positioning, especially compared to competitors that have successfully launched popular products [15][20]. - The coffee market is entering a phase of intensified competition, with new entrants and existing brands seeking to differentiate themselves through product innovation and operational efficiency [16][17]. Future Outlook - After reaching the 10,000-store milestone, Lucky Coffee faces new challenges, including profitability pressures in high-rent areas and rising raw material costs. The brand must navigate internal competition and maintain quality across its expanding network [19][21]. - The company has launched numerous new products, but many lack significant market impact, highlighting the need for stronger product development to enhance brand value [20].