Summary of Key Points
Unicorn Zhumi Technology, which once dominated global sales and revenue with its robotic vacuum cleaners, entered the coffee business in 2023 by launching the premium coffee brand DM CAFE. The first store became an instant hit thanks to a famous designer, and within four months, nearly 200 franchise stores were signed up under the “Thousand Stores Plan.” However, within just three years, the brand faced a wave of closures, and Zhumi Technology completely divested itself from DM CAFE, severing all direct equity ties. This is not just a failure of the coffee brand itself; it reflects the inevitable outcome of Zhumi’s reckless expansion into unrelated businesses in the past two years under the guise of a “borderless ecosystem” strategy. It also exposes the bubble in the industry that believed a coffee brand could be quickly established with capital alone. Today, the premium coffee market has clearly polarized, and only those brands that focus on product quality and profitability can survive.
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Simplified Explanation
1. From instant success to complete abandonment: The crazy journey of Zhumi Coffee
Zhumi Coffee’s growth was rapid and seemingly unstoppable. Launched in 2023 with the aura of a tech unicorn, the first store was designed by the famous Japanese architect Kengo Kuma in the prestigious Xibian Dream Center in Shanghai, creating a space that combined elements of a gallery, theater, and park. It sold 5,000 cups in its first three days and generated monthly revenue of 350,000 yuan—almost half a year’s worth for an ordinary community coffee shop. The brand quickly expanded to three different types of stores: premium stores in key commercial areas, trendy stores in office buildings and youth hubs, and convenience stores near subway stations. By 2025, it had launched a franchise program and signed nearly 200 stores in four months. But by August of this year, there were widespread closures. Of the original 8 stores in Shanghai, only the first one was still open, and out of the 30 stores listed on the national mini-program platform, only 23 were still functional. Zhumi Technology officially rebranded itself as “Lehe Coffee (Suzhou) Co., Ltd.” and removed itself from the brand’s shareholder list, showing no interest in the brand anymore.
2. Why bother with coffee and hot pot when the main business is so profitable?
Zhumi’s main business, robotic vacuum cleaners, was a cash cow, with annual revenue growing by over 100% for six consecutive years, reaching over 40 billion yuan in 2025. The company was the undisputed leader in the smart cleaning industry, with 80% of its revenue coming from overseas markets. After becoming so successful, Zhumi decided to expand into various businesses, claiming to create a “borderless ecosystem.” It invested in coffee, tea, hot pot, AI wearables, cars, and mobile phones, among others. However, these ventures were never intended to be long-term businesses but were used to create a larger narrative for investors. All the food and beverage projects were managed by a minority shareholder, with no core technology or team invested. Once the company made a profit, it started numerous side businesses without any serious commitment.
3. Why did the brands fail so quickly after the parent company withdrew funding?
The success of the initial stores was largely due to Zhumi Technology’s reputation and the designer’s popularity, attracting tourists for photos. However, the high costs of decoration, rent in prime locations, and labor meant that coffee sales couldn’t cover the expenses. The parent company continued to support these ventures, but when Zhumi realized the lack of profitability and the distraction from its core business, it decided to focus on four key areas: smart homes, outdoor spaces, intelligent transportation, and wearable technology. It cut off funding and equity ties to these side businesses, which, without the parent company’s support, couldn’t sustain themselves.
4. The collapse of Zhumi Coffee exposes the bubble in the premium coffee market
During the new consumer boom, many believed opening a stylish coffee shop and raising funds would lead to a quick listing. This bubble has now burst. Former leaders like Seesaw once had over 160 stores but now have fewer than 30 in operation, with some even filing for bankruptcy. Other brands like M Stand, Blue Bottle Coffee, and %Arabica have slowed down or closed costly stores. In contrast, brands that focused on quality and customer loyalty, such as Manner and Grid Coffee, have grown steadily. Coffee is a business that requires careful cost management and customer loyalty; it can’t be built on capital or superficial expansion.