T97 turned one viral chant into 500 signed coffee stores — and lost ¥100M in five years

T97 Coffee was founded in Hangzhou in April 2021 by Li Xiao, a social-e-commerce entrepreneur whose membership platform had once reported tens of billions of yuan in gross merchandise value. In autumn 2022 the brand went viral on Douyin, propelled by an addictive livestream chant — "咖啡你冲不冲,冲冲冲冲冲" (coffee, do you rush it, rush rush rush). A single livestream drew 10.82 million views and monthly exposure passed 500 million. With only 70-odd stores at the time, daily revenue per store broke ¥3,000 and 90% of stores were profitable.

Li Xiao set out to outrun the market leaders. He promised to open 1,001 stores within a year and to surpass Luckin, China's largest coffee chain, within 35 months — "T97 first, Luckin second, Starbucks third." At its peak the brand had signed more than 500 stores and opened over 200, operated by 75 franchisees. The attention was real; the store economics were not.

By the founder's own account, T97 made four mistakes. It opened million-yuan-rent flagship stores in premium malls — two lost at least ¥8 million — before it had a standard model worth copying. It hired 150 people, nearly 20 in research, while the chain had only dozens of stores. It ran four site-selection teams for free, where rivals charged, spending over ¥800,000 a month on travel; 50 trips to Guizhou opened two stores. And it let franchisees who closed within a year keep their fees and sell back equipment at half price, so even profitable stores quit. Each closure cost about ¥200,000.

Five years and more than ¥100 million in cumulative losses later, T97 was down to 11 stores, according to the restaurant-tracking service Jianmen Canyan. Li Xiao's verdict on himself: he should have polished the standard store model before chasing hype.