Goodbye to 9.9 Yuan, Luckin Coffee's Kudi Enters the Second Half of Love and Rivalry

End of the 9.9 era

Kudi Coffee (库迪咖啡) has quietly pulled the plug on the “9.9 yuan” era that re-shaped China’s chain coffee market, signaling a broader industry retreat from the brutal price war that it helped ignite. The chain announced that, from February 2026, only 3–7 items will remain at the cut‑price zone while most non‑promotional drinks will revert to 11.9–16.9 yuan — some core SKUs jumping 30–60 percent. Luckin Coffee (瑞幸), the other big name in the discount duel, had already been rolling back its own deep subsidies; together the moves mark a clear shift away from growth-at-any-cost tactics.

Why prices had to rise

How did a cup that once sold for 9.9 yuan become unsustainable? It wasn’t just marketing theater. It has been reported that an industry source estimated Kudi’s per‑cup cost at about 11.1 yuan (5.7 raw materials + 1.5 packaging + 1.9 labor + 0.2 utilities + 1.8 rent), above the 9.9 price point. Franchisees on social platforms have complained of razor‑thin or negative margins, and publicly reported results from Luckin show falling operating profit margins even as sales grow — symptoms of “increase in revenue but not in profit.” Rising coffee‑bean prices, higher rents and wages, and recent regulatory scrutiny of below‑cost dumping have further squeezed the model.

The new battleground: product, IP and franchise economics

With price weapons sheathed, the fight moves to product creativity, IP collaborations and franchise mechanics. Both chains are doubling down on limited‑edition partnerships and collectible packaging to keep customers paying a premium — Luckin with high‑profile tie‑ins such as Moutai and entertainment IP, Kudi with anime and cultural pairings including a Xu Beihong galloping‑horse line. It has been reported that Kudi’s rapid, low‑threshold expansion relied on a near‑all‑joint‑operation franchise model that boosted store counts but left many operators vulnerable; Luckin favors tighter control and higher entry standards. Which approach will produce more resilient single‑store economics? That question now matters more than ever.

A market maturing under pressure

For Western readers, the episode reads as a classic scaling paradox: cheap customer acquisition funded by external capital can grow footprint fast, but profitably? Not so fast. The end of the 9.9 era is both a corrective and a reset — painful for some franchisees, salutary for the sector. Competition has not cooled; it has evolved. Expect more creative-brand plays, deeper supply‑chain contests and a renewed focus on sustainable unit economics as China’s chain coffee market enters its “second half.”