As of May 12, Cudi Coffee’s takeaway sales on JD.com have exceeded 50 million orders, and a cup of coffee for 2.9 yuan has triggered a frenzy of consumers. However, behind this seemingly loss-making low-price strategy, what kind of business logic and profit model is hidden? This article will provide an in-depth analysis of how Cudi Coffee achieves cost control and profitability through supply chain optimization, scale effects, and unique joint venture models, while exploring the challenges and risks that its low-price strategy may face.
Recently, Cudi Coffee has been selling crazy on JD.com! As of May 12, sales have exceeded 50 million orders. What’s even more shocking is that many people actually spent 2.9 yuan to drink Cudi, and even some “wool parties” directly picked up a penny by relying on platform coupons. Let’s just say, a cup of milk tea money can drink coffee for a week, is Cudi going to “break the fracture” of coffee prices? Why does capital continue to increase? Is this seemingly crazy business game a loss to make money, or is there some way to make money? Today let’s break it and crush it and chat.
1. Use subsidies + traffic to “smash” sales to the sky
Let’s talk about the fuse of this wave of sales take-off – JD.com’s 10 billion subsidy.
Recently, JD.com has smashed real money, issued large consumption coupons, and engaged in “one piece direct drop”, Cudi took advantage of the trend to launch ultra-low-priced packages of 2.9 yuan and 3.9 yuan, directly hitting the price to the “floor price”.
Do you think, it costs 3 yuan to buy a bottle of Coke at a convenience store, and now you can drink freshly ground coffee, who can hold back this wool? Especially the uncles and aunts and student parties in the sinking market are very sensitive to prices, and when they see that they are so cheap, they directly hoard them home one refrigerator after another.
And JD.com takeaway has become Cudi’s “traffic artifact” this time.JD.com has its own user base of 140 million,Coupled with the fact that the logistics network in the sinking market is paved open, many users in third- and fourth-tier cities know for the first time that “there is still Cudi around”.
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According to the data, after many stores access JD.com’s takeaway, the average daily order volume jumped directly from the original 100 orders to 800 orders, and 70% of the orders came from JD.com. A boss joked: “In the past, the store was deserted, but now it relies on JD takeaway to come back to life, and the printer is about to come out of the spark.” ”
2. If you want to have low costs, you have to play with the supply chain
Someone asked: 2.9 yuan a cup of coffee, not even coffee beans money, right?
Is Cudi a “living Lei Feng”? Pull it down, how can there be charity in the business world, the secret is hidden in their supply chain and scale effects.
1. Self-built supply chain: “cut” costs from the source to the extreme
Cudi has long set up a global supply chain base in Ma’anshan, Anhui Province, and does coffee bean roasting, syrup production, and cup manufacturing by itself, which is equivalent to opening a “coffee factory” in its own backyard. In the past, imported Italian Fabry syrup sold for more than 170 yuan per bottle, but now it is produced by itself, and the cost is directly cut to single digits, which is outrageous!
Coffee beans rely on bulk procurement and direct procurement from the production area, with large quantities and excellent prices, and the bargaining power is firmly in hand. To put it bluntly, others are “middlemen to make the difference”, Cudi directly kicks out the middlemen and becomes a “wholesaler” himself, can the cost not be low?
2. Small shop + “fool” operation: save rent, save labor, and save everything
Now Cudi opens a store, specializing in “small and beautiful” places, and even directly engaging in “shop-in-shop” in shopping malls and convenience stores.Rent is more than 50% lower than traditional coffee shops,A lot of land can also save a lot of money.
And the equipment in the store is all intelligent, the clerk doesn’t need to learn any latte art and blending skills before taking up his post, scan the QR code, and the system will directly tell you “how much milk to add first, then how much powder to put in”,The whole process of “foolish operation”。 Labor costs have been reduced, training costs have also been saved, and even novice clerks can get started in minutes, and the efficiency is directly full.
3. Surge in stores: scale effect = diluted cost
As of February 2025, Cudi has exceeded 10,000 global stores, reaching 10,045, with a goal of opening 50,000 by the end of the year. With so many stores, the capacity utilization rate of the supply chain base is directly full, and the equipment depreciation and factory rent that were originally allocated to each cup of coffee are directly “diluted” to negligible with the surge in sales.
For example, in the past, the supply chain base had a production capacity of 45,000 tons a year and only supplied 10,000 stores, but now it supplies 50,000 stores.The fixed cost of a single cup is directly cut to 1/5 of the original.That’s the power of scale!
3. Don’t make money by selling coffee? People play with “service fee commission”
Do you think Cudi makes money selling 2.9 yuan of coffee?
Wrong!
The right way to make money is hidden“Service Fee Commission”This trick is simply too smart.
1. Tiered commission: The more the franchisee earns, the more Cudi earns
Cudi and franchisees play the “joint venture model”, which does not charge franchise fees, but takes a cut from the franchisee’s gross profit. How to draw specifically?Gross profit within 20,000 yuan will not be drawn, 20,000-30,000 will be drawn 10%, 30,000-40,000 will be drawn 15%, and 40,000-80,000 will be drawn 25%.
For example, if a store sells 800 cups a day, the gross profit can reach more than 40,000 yuan, and Cudi directly draws more than 10,000 service fees. In this model, in order to make more money, the franchisees desperately increase sales and gross profit, Cudi follows the “lying to earn”, which is equivalent to tying the interests of both parties together, the harder the franchisee, the more money Cudi makes, it is simply a “win-win”.
2. Platform subsidies as “assists”: franchisees can also earn money by selling at low prices
Some people are worried: selling so cheaply, franchisees must not lose money? Don’t worry, Cudi and JD Takeaway have arranged subsidies clearly.
For example, a cup of raw coconut latte is sold for 5.9 yuan on JD.com, and the franchisee can actually get 9.2 yuan, plus Cudi’s subsidy, it is almost 10 yuan, and the gross profit of a single cup can reach 45%. The platform bears 60% of the subsidy cost, and franchisees not only do not lose money when they sell at low prices, but earn more steadily than usual.
3. “Coffee + convenience store” model: Make a lot of money by doing side hustles
Cudi is now not satisfied with just selling coffee, playing with the “coffee + convenience store” mashup. In addition to coffee, the store also has ice cream, egg tarts, grilled sausages, and even Chinese pastries and bento boxes. If you think about it, people who come to buy coffee bring breakfast and lunch, and the unit price of customers will directly increase, and the gross profit margin will also rise. Especially in convenience stores, coffee has become a drainage product, relying on retail products to make profits, this trick “the drunkard’s intention is not in wine”, it is simply high!
Fourth, low prices are a “double-edged sword”
Cudi’s wave of operations is essentially “exchanging low prices for the market”, first raising the scale of users and stores, and then slowly settling accounts.
The data shows thatThe number of orders in the sinking market increased by 200% week-on-week, and the coverage rate of prefecture-level cities increased from 30% to 65%.The effect is really strong. But the low-price strategy is also a “double-edged sword”, and there are many risks hidden behind it.
1. Bottomless Subsidies: Can Cash Flow Withstand It?
Cudi plans to extend the subsidy policy to 2026, with a maximum subsidy of 14 yuan for a single cup, and if it really opens 50,000 stores, the annual subsidy may exceed 5 billion yuan. Although there are now platforms such as JD.com to share costs, can the cash flow bear the long-term burning of money? This is a big test for Cudi’s financing ability and capital chain management.
2. User retention problem: As soon as the subsidy stops, people run away?
Many of the users attracted by low prices are “wool parties” and are very sensitive to prices. The data shows thatCudi’s user retention rate is only 20%, while Luckin can reach 45%.When the subsidy declines, will these users come back? Cudi has to think of a way to “lock” users by product quality, membership system or value-added services, otherwise all the hard-earned users will run away, and it will be in vain.
3. Regulatory risk: Will selling at a low price be recognized as “malicious competition”?
Recently, local market supervision bureaus have targeted Cudi, suspecting that they are “selling below cost” and suspecting unfair competition. If it is found to be in violation, the fine will be small, and the brand reputation will be damaged. Cudi must carefully balance price and cost and not step on the regulatory red line.
Conclusion: Low price is not the goal, efficiency is the core competitiveness
After reading Cudi’s operation, I have to say that there is really no “losing money” in the business world.
Behind the 2.9 yuan coffee is the “hard work” of the supply chain, the “ingenuity” of model design, and the “ultimate pursuit” of scale effects.Cudi uses low prices to tear up market gaps and control costs by efficiency, essentially fighting an “efficiency war”.
But then again, low prices can only be a short-term strategy, and in the long run, they have to rely on user repurchase and brand value. Just like Luckin back then, it started with subsidies, and finally relied on product innovation and user experience to gain a firm foothold. Whether Cudi can replicate the legend or even emerge from the blue depends on whether it can maintain the bottom line of quality in the expansion and turn the users attracted by low prices into “loyal fans”.
For us consumers, no matter how the game is behind him, as long as he can drink cheap and delicious coffee, it is the last word. But I also have to remind you: although it is cool to pick wool, don’t be greedy!
