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Li Auto unites R&D and sales to counter Xiaomi’s YU7 momentum

East Asia

China

Transportation

Electric Vehicles

Mobility

Omoway, an electric motorcycle maker, has completed its seed and angel funding rounds, raising a combined eight-figure USD sum. The funding was jointly led by ZhenFund, HongShan, and Hui Capital, with founder He Tao and the core team also participating. The funds will support mass production and ongoing R&amp;D efforts.
Founded in 2024, Omoway was established by former <a href="/company/xpeng">Xpeng Motors</a> co-founder He, alongside Jiao Qingchun, a former vice president at Xpeng. The core team includes Xiao Zhiguang, former head of Xpeng’s autonomous driving unit; P7 design director Zhang Lihua; and Chen Bifeng, former head of Vivo’s Indonesia operations, who now leads Omoway’s regional market expansion.
On June 20, Omoway introduced its first smart electric motorcycle prototype, the Omo X, at an event in Jakarta, Indonesia. The vehicle drove itself onto the stage in autonomous mode.
According to 36Kr, the production version of the Omo X is scheduled to be unveiled later this year, with a market launch in Indonesia expected in 2026.
Omoway is positioning Indonesia as its entry point into the global market.
Southeast Asia represents a significant portion of the global motorcycle market. According to 36Kr, research indicates that the region accounted for 24% of global sales in 2023, with an ownership base of 250 million vehicles and 12.42 million units sold that year. Indonesia, Vietnam, and Thailand led the market.
In Indonesia, motorcycles serve as essential daily transport due to limited public transit options and the high cost of car ownership. The country is the world’s third largest motorcycle market, with over 120 million motorcycles in use, equating to roughly one for every two people. In 2024, motorcycle sales surpassed 6.3 million units. Internal combustion engine models, primarily from Japanese and South Korean manufacturers, reportedly dominate more than 96% of the market.
Over the past two years, Indonesia's electric two-wheeler market has expanded rapidly, supported by a more developed local supply chain. Government policies promoting the transition to electric vehicles have helped electric motorcycle sales grow nearly 400% in 2024, although the overall penetration remains limited.
“Indonesians tend to commute long distances and ride frequently,” Omoway’s head of finance and capital Cai Yujie told 36Kr. “Many people not only use motorcycles for daily commutes, but also travel across cities on weekends, often for four to five hours each way. As a result, there’s high demand for performance in terms of load capacity, speed, range, and versatility. Current electric bike models mainly serve short distance travel, like students or stay-at-home parents. But the heavy-duty electric motorcycle segment still lacks strong contenders with robust product capabilities, supply chain control, and localization strategies.”
Founder He said the team carried out a yearlong market study in Indonesia, visiting both urban and rural areas across Java and engaging with local distributors and users. Omoway has since built preliminary partnerships with several regional dealers. Drawing on its automotive supply chain experience, the company claims to exceed traditional two-wheeler quality standards while managing production costs. Local manufacturing operations have already begun.
Omoway’s first electric motorcycle was customized for the Indonesian market, incorporating automotive-grade smart driving technologies adapted for two-wheelers.
The Omo X runs on Omoway’s proprietary Halo full-domain smart development architecture. Its Halo Pilot system uses visual sensing and self-balancing features to support stability at low speeds. The system also offers adaptive cruise control, one-touch parking, and remote summon functionality.
On the safety front, Halo Pilot uses advanced sensing algorithms, artificial intelligence, and big data models for real-time environmental monitoring. It includes multidirectional collision alerts and a collision assist brake (CAB) system, which applies braking when it detects imminent threats the rider does not respond to, reducing potential impact severity.
In terms of design, the Omo X introduces a convertible frame that enables users to switch between step-through, straddle, and touring modes.
Omoway maintains two headquarters: one in Guangzhou for R&amp;D, and another in Jakarta for production and sales.
“Indonesia is just the beginning,” He said. “Our ultimate goal is to bring highly intelligent products into every household. In the future, our self-developed automotive-grade technologies will be deployed across broader mobility applications. Localization will be the cornerstone of our global expansion strategy.”
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3353467104588677">article</a> was written by Leslie Zhang for 36Kr.

Former Xpeng execs launch Omo X smart e-motorbike in Indonesia

Xpeng Motors

Indonesia

Southeast Asia

… sense, stablecoins may become more than just a payment tool—they could form the foundation for how value is moved, settled, and grown in a digitized world.
This article was published in partnership with <a href="https://www.htx.com/ventures">HTX Ventures</a>.
<hr style="margin-bottom: 20px;" />
About the author: This article is authored by Alec Goh, head of HTX Ventures, the global investment arm of HTX, one of the world’s largest cryptocurrency exchanges. Goh leads strategic investments in high-potential digital asset projects, with a focus on infrastructure, compliance-first DeFi, and stablecoin ecosystems. Previously, he spearheaded the firm’s M&amp;A and investment efforts, contributing to its global expansion and some of the industry’s most notable exits. With a background in global finance and deep experience in structured transactions, Goh bridges institutional capital with the next generation of Web3 innovation.

Reimagining financial infrastructure: How stablecoins are quietly reshaping global value flows

Cryptocurrencies

… sales. But interest waned as newer models like the Luxeed R7 and Zeekr 007 entered the market. Shoppers focused on specifications and price often shift quickly.
As platforms and supply chains standardize, differences among vehicles are becoming less noticeable. Competing solely on configuration and pricing may yield short-term gains, but it’s no longer a reliable path to brand loyalty.
For any automaker looking for sustained relevance, a business model based on genuine user needs is essential. This means evolving beyond functional benefits to offer emotional value—a brand story users connect with.
<a href="/company/tesla">Tesla</a> achieved this by becoming a symbol of innovation. Elon Musk’s ambitions in space exploration helped shape the company’s identity as more than just an automaker. Its minimalist design, performance benchmarks, and smart systems support a broader narrative: Tesla is for people who believe in the future.
<a href="/company/li-auto">Li Auto</a>, by contrast, focused on China’s middle-class families. Its formula of “fridge, television, and big sofa” was not just about features but an understanding of what provides comfort and security.
Xiaomi’s pitch is more personal. As uncertainty grows and pressures increase, younger consumers are seeking more emotional value. Xiaomi presents a narrative of self-delight: technology that not only solves problems but offers moments of joy. The SU7 and YU7 seem aimed at users who value style, individuality, and emotional resonance.
In a June 23 Weibo post, Lei explained why the YU7 isn’t a six-seater, bucking market trends. “SUV stands for sport utility vehicle,” he wrote. “We chose to stick to the original spirit of the category and build a true sports vehicle.”
He added, “Fridges, TVs, and big sofas are important, but so is the driver’s experience.” Xiaomi is turning this philosophy into product strategy.
Design serves as an emotional amplifier. While most family SUVs prioritize practicality, Xiaomi opted for a long, sculpted front even for an EV. Few other cars at this price offer comparable visual distinctiveness. For Xiaomi, aesthetics are now central to its automotive branding.
Xiaomi’s emphasis on speed and handling also recalls its early days in smartphones, when hardware performance was key. The YU7, while a family vehicle, retains some of that spirit through its material choices and tuning.
With a dedicated customer base, Xiaomi understands it must deliver what users value most. By carrying its passion-driven approach from phones into automotives, Xiaomi has seemingly created a car that reflects its brand first, and a family SUV second.
In a market largely defined by functionality, the YU7 blends technology with emotional appeal. This may be Xiaomi’s greatest strength: beginning not with the product, but with the user, and building from there.
Still, stories need grounding. Xiaomi must provide real, visible value. Design, driving enjoyment, and integration with its broader ecosystem are promising starts. Whether these values can deliver long-term consistency remains the key test.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3351543585895047">article</a> was written by Xu Caiyu for 36Kr.

Xiaomi’s YU7 stirs emotion and demand with over 200,000 orders in minutes

<blockquote>China Recap is a weekly roundup tracking Chinese companies expanding abroad, covering market entries, funding rounds, product launches, and global partnerships.</blockquote>
China’s corporate globalization strategy is evolving fast. Industry giants are rewriting the global playbook, while a new generation of companies charts fresh paths overseas.
China Recap tracks both—focusing on strategic expansion, brand building, and localized operations—to help readers make sense of shifting trends and understand how Chinese firms are reshaping their global approach.
Here’s what made headlines last week:
<h3><a href="/industry/robotics">Robotics</a> players shift into next gear globally</h3>
<ul>
<li>MegaRobo Technologies, a life sciences automation and robotics company, filed for a potential listing on the Hong Kong Stock Exchange, appointing Morgan Stanley, Huatai Financial, Deutsche Bank, and CCB International as overall coordinators. No public offering is currently underway, and the listing remains subject to regulatory approval.</li>
<li>Casbot, a Chinese startup focused on humanoid robots, raised nearly RMB 100 million (USD 14 million) in an angel plus funding round. Backers include Lens Technology, Tianjin Jiayi, and existing investors SDIC Unity Capital and Henan Asset Management. The funds will support mass production and R&amp;D as Casbot expands in industrial and mining applications.</li>
<li>Standard Robots filed for a Hong Kong IPO with joint sponsors CITIC Securities and Guotai Junan International. Founded in 2016 in Wuxi, the company specializes in robotics and <a href="/industry/ai">artificial intelligence</a> software, and is backed by investors including <a href="/company/xiaomi">Xiaomi</a>, Broad Vision Funds, and China Capital Management. —<a href="https://36kr.com/newsflashes/3350225439088768">36Kr</a></li>
<li><a href="/company/nvidia">Nvidia</a> and Foxconn are in talks to deploy humanoid robots at a new plant in Houston, Texas, where Foxconn will produce Nvidia’s GB300 AI servers, sources said. If finalized, the site would mark the first use of humanoid robots on the production line for either company. —<a href="https://www.cls.cn/detail/2063675">Cailian Press</a></li>
<li>Unitree Robotics, a Chinese maker of quadruped and humanoid robots, has raised new funding from top tech investors including <a href="/company/alibaba">Alibaba</a> (and its affiliate <a href="/company/ant-group">Ant Group</a>), <a href="/company/tencent">Tencent</a>, China Mobile, <a href="/company/geely">Geely</a>, and <a href="/company/bytedance">ByteDance</a>-linked Jinqiu Capital, pushing its valuation past RMB 10 billion. The company is considering a Hong Kong listing. —<a href="https://www.scmp.com/tech/big-tech/article/3315225/unitree-robotics-reaches-unicorn-status-bytedance-alibaba-tencent-funding">SCMP</a></li>
</ul>
<h3>Xpeng launches the X9 in Indonesia</h3>
<a href="/company/xpeng">Xpeng Motors</a> has launched its X9 MPV in Indonesia at a starting price of IDR 990 million or around USD 61,000, with local production slated to begin in July. The plant marks Xpeng’s first overseas manufacturing base as it targets Southeast Asia’s largest automotive market. —<a href="https://finance.sina.com.cn/tech/2025-06-26/doc-infcktkn1544717.shtml?froms=ggmp">Sina</a>
<h3>Anjoy targets expansion in Southeast Asia</h3>
Anjoy Foods, China’s leading frozen hotpot supplier, plans to raise up to HKD 2.64 billion (USD 336.3 million) in a Hong Kong listing on July 4. The proceeds will fund expansion in Southeast Asia and Europe, where demand for Chinese cuisine is growing. The company reportedly holds a 6.2% share of the mainland market and reported RMB 15.1 billion (USD 2.1 billion) in revenue last year. —<a href="https://www.scmp.com/business/china-business/article/3315698/chinese-hotpot-giant-anjoy-foods-eyes-southeast-asia-and-europe-after-hong-kong-listing">SCMP</a>
<h3>Neta Auto risks subsidy clawback in Thailand</h3>
Thailand warned Neta Auto it may need to repay more than THB 2 billion (USD 61.5 million) in subsidies if it fails to meet local <a href="/industry/ev">electric vehicle</a> production targets under a national incentive program. With only 4,000 of the required 19,000 vehicles produced this year, authorities are tightening oversight and proposing stricter reporting requirements. —<a href="https://www.ithome.com/0/863/655.htm">IT Zhijia</a>
<h3>China's Ningji partners with CP Group</h3>
Chinese lemon tea brand Ningji partnered with Thailand’s CP Group to support its Southeast Asia expansion, gaining access to CP’s supply chain and retail network. The deal follows earlier backing from Tencent, ByteDance, and Shunwei Capital. —<a href="https://www.geekpark.net/news/350756">GeekPark</a>
<h3>GAC kicks off EV production in Jakarta</h3>
<a href="/company/gac">GAC Group</a> opened a smart factory in Jakarta, marking a key step in its “One GAC 2.0” globalization strategy. The site reportedly features AI-powered manufacturing and supports the company’s effort to localize EV production in Southeast Asia. The plant anchors GAC’s Indonesia initiative and long-term plan to develop a local supply and service ecosystem.
<h3>Huawei debuts CloudRobo AI platform</h3>
<a href="/company/huawei">Huawei Cloud</a> unveiled its CloudRobo platform at its developer conference on June 20, reportedly offering embodied AI capabilities built on the Pangu model. The system supports multimodal data generation, complex planning, and millimeter-level execution, targeting use cases from automotive assembly to semiconductor logistics. —<a href="https://www.guancha.cn/economy/2025_06_20_780175.shtml">Guancha</a>
<h3>Baidu plans Apollo Go rollout in Southeast Asia</h3>
<a href="/company/baidu">Baidu</a> plans to launch its Apollo Go robotaxi service in Singapore and Malaysia as early as this year, seeking local partners for an asset-light model. The service has logged 11 million rides, reportedly surpassing Waymo, and is also exploring markets including Turkey and Switzerland. —<a href="https://www.bloomberg.com/news/articles/2025-06-20/china-s-baidu-eyes-robotaxi-expansion-to-singapore-and-malaysia">Bloomberg</a>
That wraps up this edition of China Recap. If your company is expanding internationally, we’d love to hear about your latest milestones. <a href="mailto:changweiqian@global.36kr.com">Get in touch</a> to share your story.

China Recap | Robotics players shift into next gear

… the administration, given Trump's "focus on AI dominance over China."
Musk could also have a unique opportunity in China, where his company helped lay the <a href="https://asia.nikkei.com/Business/Automobiles/Electric-vehicles/Tesla-faces-uphill-battle-in-China-as-Trump-Musk-dust-settles">groundwork for the EV industry</a>. Last year, Chinese state media reported that Beijing told Musk it would welcome Tesla to do some robotaxi tests in the country, as it could "set a good example."
If Musk were to succeed in rolling out robotaxis in China, local players would see it as a positive rather than a threat, the above senior executive from the Chinese operator told Nikkei Asia.
"This market is nowhere near cutthroat competition yet. It's still a blue ocean," the senior executive said. "Right now, all the players combined haven't even captured 0.1% of its potential, so there's no need for concern. If Tesla's robotaxi enters China and helps grow the overall market, while also advancing policy and increasing public awareness, it would be a huge benefit for the entire industry."
But not everyone believes expertise in making EVs guarantees success in running a robotaxi service.
Tesla or other carmakers may have their advantages as manufacturers, but they don't necessarily have the operational knowledge to optimize the robotaxi service, said Jun Peng, CEO of Pony.ai.
While vehicle production cost will be a factor in success, the ability to operate a fleet efficiently, including providing maintenance and customer service, will also be key, especially as companies ramp up service in more locations.
"And if we are talking about cost, that's Chinese companies' strengths," said Peng, pointing to the supply chain ecosystem in China that allows Pony.ai to produce robotaxis at a fraction of Waymo's cost.
Chinese robotaxi players have more cost advantages in vehicles and autonomous driving kits, thanks to the country's robust automotive supply chain, including for components like batteries and LiDAR, or light detection and ranging sensors. In contrast, US robotaxi firms have greater access to advanced hardware, such as high-performance chips, and typically enjoy stronger capital support due to backing from major technology and automotive corporations, said Ming Lee, head of Greater China automotives and industrials research at BofA Global Research.
As China and the US each push ahead with their self-driving ambitions, politics will likely play an increasingly important role in the race.
The administration of previous US President Joe Biden issued a ban on Chinese autonomous vehicle software and hardware last year that is set to go into effect in 2026. Meanwhile, Beijing's data export controls have hindered attempts by foreign companies, including Tesla, to enter the China robotaxi market, though draft guidelines were issued earlier this month to regulate the export of automotive data generated within the country. The proposed rules could offer a pathway for Tesla and others that have been trying to transfer such data abroad to make inroads in China.
In the near future, Europe and the Middle East are expected to be the key markets where Chinese and US players compete head-to-head.
"Low cost is the major advantage for Chinese robotaxi companies," BofA's Lee said. "In addition to that, Chinese companies having an edge in advancing their algorithms faster, as the road conditions and drivers' behavior in China are more complicated, allowing these Chinese robotaxi companies to collect more data in complicated driving scenarios. As a result, these Chinese companies are ready to roll out their robotaxis in overseas markets sooner."
In China, meanwhile, a sense of urgency is growing. The senior executive from the Chinese robotaxi company said industry leaders have repeatedly urged their government to recognize the progress made in the US, warning that China risks falling behind if companies remain restricted to small-scale trials in peripheral urban areas.
"The Chinese government will still be keenly attentive to US developments in this sector, as only China and the US currently possess the requisite technological capabilities," he said. "At the policy level, Beijing maintains a supportive stance overall."
This article first appeared on <a href="https://asia.nikkei.com/Business/Technology/Tech-Asia/Taking-the-wheel-US-and-China-jockey-for-robotaxi-leadership">Nikkei Asia</a>. It has been republished here as part of 36Kr’s ongoing partnership with <a href="https://www.kr-asia.com/nikkei-teams-up-with-36kr-in-asia-tech-news-coverage/">Nikkei</a>.

Taking the wheel: US and China jockey for robotaxi leadership

Autonomous Vehicles

Eyeglasses were invented to improve vision. But these days, they can do much more than just that. Imagine walking through a bookstore in a foreign country. You glance at the cover of a novel, and a voice quietly reads the title in your native language. Later, at a cafe, you ask for your glasses to pay the bill. The transaction completes automatically, no fumbling for a phone or wallet needed.
This kind of everyday utility would have sounded far-fetched less than a decade ago. But that is exactly what <a href="/company/xiaomi">Xiaomi</a> is aiming for with its newly launched smart glasses.
Named simply the Xiaomi AI Glasses, the device integrates the company’s hardware and software into a lightweight frame designed for daily use. Weighing just 40 grams, the glasses retain the silhouette of classic D-frame eyewear. A Sony 12-megapixel ultrawide camera enables 2K video recording with electronic image stabilization. It can capture a photo in just 0.8 seconds and integrates with a wide range of popular Chinese apps, including <a href="/company/douyin">Douyin</a> and DingTalk.
The standout feature, however, is the built-in voice assistant. Users can give voice commands to perform tasks such as taking photos and videos, live streaming, translating text seen through the glasses, answering basic questions, or setting reminders. Xiaomi says the assistant can also control smart home devices and will soon support QR-based payments. Audio responses come through dual open-ear speakers, while a five-microphone array with bone conduction ensures clear input during calls and commands.
A Snapdragon AR1 chip powers the device, backed by a battery that supports up to 8.6 hours of video playback or seven hours of continuous operation.
The glasses also feature electrochromic lenses that shift tint levels in about 0.2 seconds via dual-finger swipes on the touch-sensitive temples. Users can switch among four tint levels. While this adds a stylish and somewhat functional flair, it is ostensibly more a modernized take on transition lenses than a technical leap.
The Xiaomi AI Glasses will be available in three colors: black, brown, and green. The brown and green variants will feature semi-transparent casings that partially reveal the device's internal components.
<figure id="attachment_155098" aria-describedby="caption-attachment-155098" style="width: 1920px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="wp-image-155098 size-full" src="https://console.kr-asia.com/wp-content/uploads/2025/06/Xiaomi-AI-Glasses-Launch.jpg" alt="" width="1920" height="1080" srcset="https://console.kr-asia.com/wp-content/uploads/2025/06/Xiaomi-AI-Glasses-Launch.jpg 1920w, https://console.kr-asia.com/wp-content/uploads/2025/06/Xiaomi-AI-Glasses-Launch-720x405.jpg 720w, https://console.kr-asia.com/wp-content/uploads/2025/06/Xiaomi-AI-Glasses-Launch-1024x576.jpg 1024w, https://console.kr-asia.com/wp-content/uploads/2025/06/Xiaomi-AI-Glasses-Launch-768x432.jpg 768w, https://console.kr-asia.com/wp-content/uploads/2025/06/Xiaomi-AI-Glasses-Launch-1536x864.jpg 1536w, https://console.kr-asia.com/wp-content/uploads/2025/06/Xiaomi-AI-Glasses-Launch-480x270.jpg 480w" sizes="(max-width: 1920px) 100vw, 1920px" /><figcaption id="caption-attachment-155098" class="wp-caption-text">CEO Lei Jun officially unveiled the Xiaomi AI Glasses at the company’s “Human x Car x Home” event on June 26. Image and header image source: Xiaomi.</figcaption></figure>
After a delay from the <a href="https://kr-asia.com/xiaomi-to-launch-new-ai-glasses-after-ray-ban-meta-stirs-china-demand">originally planned April debut</a>, the glasses were officially launched on June 26. The standard edition is priced at RMB 1,999 (USD 279.9). Two electrochromic variants, one with single-tint lenses and one with multiple tint levels, are priced at RMB 2,699 (USD 377.9) and RMB 2,999 (USD 419.9), respectively.
The release arrives at a time when the smart glasses market is rapidly gaining momentum. According to <a href="https://www.counterpointresearch.com/insight/post-insight-research-notes-blogs-rayban-meta-smart-glasses-drive-global-smart-glasses-market-surge-in-2024-fuelling-momentum-in-2025-with-projected-60-cagr-through-2029/">Counterpoint Research</a>, global smart glasses shipments surged 210% last year, with the market expected to expand 60% year-on-year in 2025.
Xiaomi’s entry also comes as major competitors already occupy the space. <a href="/company/huawei">Huawei</a> introduced an <a href="https://www.scmp.com/tech/big-tech/article/3306941/huawei-unveils-upgraded-ai-powered-smart-eyewear-compete-crowded-market">upgraded model</a> in April with a titanium frame, gesture control, voice commands, and translation features. Meanwhile, <a href="/company/baidu">Baidu</a> plans to release Xiaodu-branded smart glasses later this year, using its Ernie models and DuerOS system.
Beyond the major players, smaller companies are exploring distinct niches. <a href="https://kr-asia.com/can-superhexas-ai-glasses-triple-up-as-headphones-translator-and-virtual-assistant">Superhexa’s Jiehuan glasses</a> emphasize real-time translation and can summarize concurrent activities, such as incoming WeChat messages. <a href="https://kr-asia.com/ai-glasses-for-all-sharge-shakes-up-the-market-with-rmb-999-launch">Sharge’s A1</a> prioritizes memory capture through video recording and artificial intelligence-assisted recall, positioning itself more as a lifestyle recorder than a digital assistant. <a href="https://kr-asia.com/the-garmin-of-ai-glasses-arknovvs-smart-specs-are-built-for-athletes-not-the-masses">ARknovv’s BleeqUp Ranger</a>, on the other hand, caters to athletes with features like crash-aware video logging.
These different approaches show that the category remains unsettled. Some brands are leaning into immersive, AI-based utilities, while others target niche uses like translation or fitness. Xiaomi seems to be positioning itself in the middle, betting on a multipurpose, voice-driven device that integrates practical functions with its existing software ecosystem.
And although it’s new to the category, Xiaomi has a precedent for catching up fast. Its electric vehicle, the SU7, launched last year in China’s crowded EV market after competitors like BYD had already secured strong footholds. Yet the SU7’s early sales exceeded expectations, showing Xiaomi’s ability to convert brand equity and scale into market share.
With the smart glasses market still taking shape, Xiaomi appears to be betting that its integrated approach and distribution reach can deliver similar results.

Xiaomi steps into smart eyewear with voice-enabled glasses built for everyday use

Artificial Intelligence

Deep Tech

As may be evident from its store-in-store strategy and convenience store footprint, <a href="/company/cotti-coffee">Cotti Coffee</a> has never let up in its pursuit of scale.
According to multiple sources familiar with the matter, Cotti now operates more than 15,000 stores, including 3,000 that are not yet open. This figure includes standard outlets, store-in-store units, and convenience stores.
In a recent internal meeting, Cotti founder Lu Zhengyao reportedly said that nearly 90% of standard outlets posted a monthly net profit exceeding RMB 10,000 (USD 1,400) in May. Cotti refers to this threshold as the “green light” indicator.
If accurate, this 90% profitability rate suggests that the company’s aggressive delivery subsidies, implemented since April, have yielded positive results. In recent months, Cotti has ramped up efforts on delivery platforms. According to 36Kr, its total order volume on <a href="/company/jd">JD.com</a> alone has surpassed 100 million. Earlier reports indicated that in several regions, franchisees saw their order volume double while maintaining a gross margin of approximately 45%.
Cotti has also leaned on brand collaborations to drive foot traffic. Franchisees told 36Kr that the company has rolled out monthly IP partnerships this year, featuring franchises like Ne Zha, Crayon Shin-chan, and more recently, My Little Pony. The Ne Zha campaign in March, which bundled drinks with themed merchandise, was particularly effective in boosting sales. One franchisee also shared that Cotti’s sponsorship of the Argentina national football team will continue through the 2026 FIFA World Cup.
At a recent franchisee conference, the company disclosed that average operating cash flow per store in May reached RMB 27,000–28,000 (USD 3,780–3,920), marking a record high and a 40% year-on-year increase.
Store count is growing, franchisees are turning a profit, and Cotti, for the first time in a while, appears to have gained some breathing room.
Reflecting on the past year, especially the difficult winter season, the company’s main concern has been scale. Retaining and expanding its franchisee base is central to maintaining its subsidy-driven growth model. Since 2023, Cotti has also invested in supply chain infrastructure, particularly in Anhui, which requires a larger retail footprint to absorb capacity. This may help explain why Lu stated that Cotti aims to reach 50,000 stores by 2025.
When growth in standard outlets began to plateau last year, Cotti launched an initiative to open 8,000 store-in-store units in six months. However, the effort added only about 1,000 locations before it was quietly phased out due to staffing challenges and inconsistent branding.
At the time, a franchisee explained to 36Kr that sharing staff between Cotti and other in-store brands was unworkable. Having untrained personnel prepare beverages led to issues with product quality and shelf life. Budget constraints in the store-in-store model also meant there was little room to hire dedicated baristas.
Still, Cotti has never let go of its obsession with scale. This year, it shifted focus to its convenience store format, presenting it as a new driver of growth. The model offers a relatively low entry barrier: RMB 50,000 (USD 7,000) as a downpayment, with an equal deposit and the balance payable over 36 months.
Yet, no matter how many new formats Cotti experiments with, the goal of reaching 50,000 stores seems increasingly out of reach.
Cotti appears to be adjusting to this reality. Instead of chasing an unattainable number, the company is now turning its focus to improving performance at existing stores.
Earlier this year, a surge in sales was accompanied by a wave of criticism on social media. Customers complained of inconsistent product quality, unhygienic preparation areas, delivery errors, and even drinks missing their coffee shots, as some customers report receiving fruit juice after ordering lattes.
According to a source close to the company, Cotti will deploy 1,100 regional managers across the country beginning in the second half of 2025. “Cotti wanted to do this last year,” the source said, “but franchisees were seeing low volumes during the offseason. Cracking down on store operations too hard would have sparked pushback and potentially increased closure rates.”
Put differently, the pressures of Cotti’s low-price model, where a cup of coffee typically sells for RMB 9.9 (USD 1.4), has hitherto been shouldered by subsidies. The company, stretched thin, has struggled to implement a structured operational framework under these conditions. But one franchisee summarized the company’s new direction this way:
<blockquote>“Cotti’s management will be much stricter going forward. Before, it was all surveillance cameras and fines. Now, with onsite inspections, violations could lead to forced closures and restructuring.”</blockquote>
With 1,100 managers overseeing 15,000 stores, the oversight ratio would improve to about one manager per 14 outlets. A former regional manager told 36Kr that under normal conditions, one person can manage up to 30 stores. “At the peak of growth in 2024, some managers were overseeing more than 90 outlets. Operations were totally disorganized back then.”
whereRelatedArticle
The road from rough-and-ready expansion to standardized management is familiar territory for any leading coffee chain, and a welcome sign of maturity for franchisees.
Still, this moment of reprieve may not last.
Much of Cotti’s recent growth has been supported by delivery subsidies, co-funded by JD.com and the company itself. These subsidies represent a significant financial burden. With the current average price on JD’s platform just under RMB 9.9, any reduction in subsidies is likely to affect order volume. As that happens, store performance will depend more on operational discipline than promotional tactics.
Despite it all, Cotti’s fixation on scale hasn’t disappeared as competition remains ongoing. “Come winter,” one franchisee said, “there will be another shakeout. Coffee isn’t a get-rich-quick business anymore. Survival of the fittest is the only rule that still applies.”
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3351243013335942">article</a> was written by Zhong Yixuan for 36Kr.

After racing to 15,000 stores, Cotti Coffee gets serious about quality control

Cotti Coffee

Retail

Consumer Economy

Coffee

… round was led by Yifeng Capital, with participation from existing investors Qiming Venture Partners and Huangpu Medical Fund. Poseidon Hill Capital acted as the financial advisor. Tingsn will use the funding to advance R&amp;D and clinical validation for its 4D intracardiac echocardiography products. —<a href="https://36kr.com/p/3350605027633792">36Kr</a></li>
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<li aria-level="1">Salmon Group, a financial services platform, secured USD 88 million through a mix of bond and equity funding. Spice Expeditions led the equity round, joined by US institutional investors, Antler Elevate, and existing backers including the International Finance Corporation (IFC), Abu Dhabi’s Lunate, Northstar, and Back in Black Capital.</li>
<li aria-level="1">InstaPay Technologies, a Malaysia-based digital payments company, closed a Series A2 funding round, raising approximately USD 3 million. The round was led by US-based family offices, with follow-on participation from ACA Investments.</li>
<li aria-level="1"><a href="https://www.the10ants.com/">10Ants</a>, an urban revitalization startup, secured USD 500,000 in pre-seed funding from Wavemaker Impact.</li>
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