Food & BeverageChina
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JOURNEY · DETAIL
Manner Coffee: From a 2-square-meter stall on Nanyang Road, Shanghai, to a fully direct-operated specialty affordable coffee chain
Founded: Han Yulong, Lu Jianxia · Shanghai Yinher Industrial Co., Ltd.
JOURNEY
Key Fields
FIELD STAMPSIndustryFood & Beverage
RegionChina
ScaleGiant
ChannelOther
Origin
In 2015, Han Yulong once opened a photography studio in Nantong and later entered the coffee industry, working on the bar and in training. He judged that domestic specialty coffee at the time was either 'third-wave' space shops with a per-capita spend of over 30 RMB or convenience-store-level affordable coffee, leaving a gap for a price range that was 'delicious and affordable.' That year, he opened the first Manner at a stall of only about 2 square meters on Nanyang Road in Shanghai, offering Americano for 15 RMB, latte for 20 RMB, and an additional 5 RMB discount for bringing your own cup. He personally made the coffee, targeting specialty coffee consumers with low prices and high quality, and built the business up bit by bit through word of mouth.
Milestones
2015
Inception Turning Point
Han Yulong opened the first Manner on Nanyang Road in Shanghai. The store was only about 2 square meters with almost no seating. Americano was priced at 15 RMB, latte at 20 RMB, and bringing your own cup offered a 5 RMB discount. Han Yulong personally crafted every cup, with early daily output around several dozen cups, laying the prototype for the 'small shop + low-price specialty' model that would be replicated across all future stores.
2015
Single-Store Refinement Period Failure
For the first three years, Manner expanded almost not at all. Han Yulong insisted strictly on direct operation without franchising. Although the single-store model had great word of mouth, its scale was extremely small. Attempts during this period at out-of-town site selection and model adjustments failed to meet expectations, leaving the store count lingering in the single digits for a long time. Peers viewed it as a 'sentimental shop,' and external financing received virtually no attention. This phase lasted from 2015 through 2017.
2018
First Round of Financing Turning Point
Kathy Xu (Xu Xin) led Capital Today in making a sole investment in Manner, marking its first external financing. Kathy Xu personally drove Han Yulong to embrace capitalization and standardization. Manner began introducing a management team and establishing SOPs, expanding its store model from stalls to seating stores. By the end of 2018, stores surpassed around 10, stepping out of the single Shanghai store phase.
2019
Model Validation PMF
Manner established the strategy of 'full direct operation, no franchising, and delivery not being the priority.' Stores radiated outward with Shanghai as the core, and same-store revenues climbed rapidly. In 2019, stores exceeded 50. Once the single-store model was validated, it began to gain recognition from capital. Securing further investment in 2020, Manner was regarded by the market as a rare correct answer for 'scaling specialty coffee.' This phase lasted from 2019 through 2020.
2021
Intensive Capital Entry Growth
In 2021, Manner successively completed multiple rounds of financing, with investors including Temasek, Coatue, and Meituan Longchuang. It completed multiple rounds in just the first half of the year alone, prompting media to dub it 'raising funds almost every month.' Valuations climbed rapidly, and stores surpassed 200 that year, expanding from Shanghai to cities like Beijing, Shenzhen, and Chengdu, becoming a unicorn-level coffee brand.
2023
Breaking 1,000 Stores Transition
By the end of 2023, Manner's store count exceeded 1,000. Media outlets like 36Kr reported it as 'the surviving hope of specialty coffee.' However, accompanied by rapid expansion, single-store cup volumes were diluted and baristas' working hour pressures increased. Han Yulong still insisted on the full direct-operation approach, diverging in route from Luckin and Cotti amidst the temptations of delivery and franchising, and entered deep waters of scaling.
2024
Labor Crisis Erupts Failure
In June 2024, two Manner stores in Shanghai successively experienced videos of conflicts between baristas and customers going viral. Employees were exposed to having to make hundreds of cups a single day with minimal rest time. On social media, Manner employees compared themselves to 'beasts of burden (niu ma).' Tencent News reported that founders Han Yulong and Lu Jianxia held a net worth of 7.2 billion RMB, forming a sharp contrast with the operational intensity of front-line staff. Brand reputation dropped significantly, forcing emergency adjustments to shift schedules and compensation.
Turning Points
- In 2015, Han Yulong chose to open a 2-square-meter stall on Nanyang Road rather than a spacious cafe, pushing the specialty coffee price tier to the lowest level with a 15 RMB Americano and a 5 RMB discount for bringing your own cup.
- In 2018, accepting investment from Kathy Xu of Capital Today shifted Manner from a specialty small shop persevered by Han Yulong alone to capitalized operations, allowing the store model to be replicated.
- In 2023, even as stores broke 1,000, it insisted on full direct operation and refused franchising, walking a differentiated path amidst the Luckin and Cotti price wars while bearing all labor and rental risks as a result.
- In June 2024, barista conflicts and the 'niu ma' public opinion storm erupted, forcing Manner to directly face the structural contradiction between scaling and employee intensity, and forcing an adjustment to its expansion pace.
Failures & Pitfalls
- From 2015 to 2017, Manner remained at single-digit stores for a long time. Han Yulong's persistence against opening franchises led to extremely slow expansion, and it was once judged by peers as a sentimental shop that 'could not grow big.'
- Early attempts to replicate the model in other regions and different store formats repeatedly failed to meet expectations, leading to some store formats being abandoned and proving that the stall model does not work for every location.
- In June 2024, the labor crisis erupted intensively. After videos leaked, Manner's brand reputation plummeted sharply, and tensions between employees and management became public, forcing the company to urgently adjust shift schedules and compensation systems.
- Under the full direct-operation model, Manner consistently bore high labor costs. Under-staffing per single store led to high-pressure operations for baristas; the faster the scaling, the greater the labor risk.
关键成功要素
- Pushing specialty coffee prices into the 15 RMB tier, establishing dual mindset awareness of environmentalism and affordability through 'bringing your own cup for a 5 RMB discount.'
- Insisting on full direct operation, no franchising, and delivery not being the priority, trading stable quality control at the expense of expansion speed and risk-buffering capacity.
- Using the 2-square-meter stall model to compress rent and renovation costs, maximizing spatial efficiency (pingxiao), with single-store payback periods shorter than peers.
- After intensive capital entry, it took only about 4 years for stores to scale from 50 to 1,000, but the labor model was not upgraded synchronously, ultimately being exposed in the 2024 crisis.
Lessons
- The moat of low-price specialty is not just price, but pressing the cost structure to a degree competitors find hard to replicate; the 2-square-meter stall is an extension of cost design rather than a coincidence.
- Rejecting franchising in exchange for quality control also means concentrating all labor risks and expansion pressures at headquarters; upon reaching a certain stage of scaling, the labor model must be restructured.
- Before accelerating expansion with capital, same-store profitability and employee carrying capacity must be verified, otherwise once stores break 1,000, the first thing to collapse may be service experience rather than financials.
- Once the contrast between the founders' net worth and front-line employee intensity is magnified by public opinion, brand premium will collapse faster than store numbers; management must precede expansion.
Core Data
- 首家门店面积：2 square meters (based on public information sources, independent verification pending)
- 起步杯价：Americano 15 RMB, Latte 20 RMB (based on public information sources, independent verification pending)
- 自带杯优惠：5 RMB discount (based on public information sources, independent verification pending)
- 首笔外部融资：Sole investment by Capital Today in 2018 (based on public information sources, independent verification pending)
- 2023年底门店数：Over 1,000 stores (based on public information sources, independent verification pending)
- 2024年创始人夫妻身家：Approximately 7.2 billion RMB (based on public information sources, independent verification pending)
- 2021年估值：Reported around $2.8 billion, though officially unconfirmed (based on public information sources, independent verification pending)
- 2024年估值：Media reported around $2 billion, declining from the 2021 peak (based on public information sources, independent verification pending)
Competitors / Peers
Manner's primary direct competitors are Luckin Coffee and Cotti Coffee, both of which rapidly scaled to tens of thousands of stores using a franchise + digital front-end + 9.9 RMB price tier model. As of 2024, Luckin surpassed 20,000 stores and Cotti exceeded 7,000 stores, forming a sharp contrast with Manner's heavy-labor model of full direct operations and high staff allocation per single store. Specialty coffee brands like Seesaw, %Arabica, and M Stand occupy the same 15–40 RMB price tier, but their store footprints are much smaller than Manner's—mostly ranging from dozens to hundreds—and rely more on spatial experience than ultimate spatial efficiency. Starbucks still holds mindshare in the high-end price tier, though it partially overlaps with Manner's price range. Following the 2024 labor controversy, Manner has been re-evaluated by the market as a critical sample of whether it can carve out a 'third path' amid the sandwiching pressure of Luckin and Cotti.
Sources
- https://m.36kr.com/p/2835146792775942
- https://www.36kr.com/p/2471233857394567
- https://www.36kr.com/p/3562195243489409
- https://mp.weixin.qq.com/s/dROd3blJ-D7W78TuChawDA
- https://news.qq.com/rain/a/20240625A01N4T00
- https://www.huxiu.com/article/3178135.html
- https://www.yicai.com/news/103024077.html
- https://businesstimescn.com/articles/619133.html