By LI Ye

Manner Coffee said on Monday that its 1000th store is soon to open. That means it will finish its annual target ahead of schedule.

Established in Shanghai in 2015, Manner Coffee is an affordable boutique coffee brand, specializing in small stores with individual cup prices of around 20 yuan (US$3). In its first three years, it only opened three stores, all of them in Shanghai. Manner said on Monday that its 1,000th store is to open soon. 

Expansion began in 2018 after securing funding from Capital Today, Temasek, and ByteDance and Manner is soon to be the first coffee chain in China to reach 1,000 stores without franchising. 

More than half of Manner’s stores are in Shanghai, and almost all the rest are in Beijing, Guangzhou and Shenzhen. 

With the highest number of coffee shops globally, Shanghai is a prime site for international brands but also nurtures numerous local coffee brands, Manner being one of them.

Manner is everywhere in Shanghai from shopping centers to subway transfer corridors, with a third of its stores within 500 meters of another store. In 2021, after another round of financing, its valuation reached US$2.8 billion, and Manner focused on expanding.

Manner's future growth model should not be limited to just Shanghai or first-tier and second-tier cities. But that brings new challenges: no boutique coffee house has tried to conquer the rural areas of China.

Manner's average daily revenue per store is around 7,500 yuan, with each customer spending about 20 yuan. This results in a daily output of approximately 400 cups. 

In the lower-tier market, it remains to be seen whether there are enough premium coffee consumers to contribute to the cup output needed to support its single-store model.

Manner uses semi-automatic coffee machines that demand a higher skill level from baristas compared to the fully automatic machines used by Luckin and Starbucks. Net profit per store can reach 57,000 yuan, at a net margin of 24 percent.