Summary of Key Points
The established online celebrity-owned premium coffee brand Seesaw Coffee has entered bankruptcy proceedings due to financial issues, becoming the first premium chain brand to fall in the battle for coffee prices. The company once raised hundreds of millions in funding through its differentiated products and unique store design, opening nearly 200 stores. However, it collapsed under the pressure of low-priced, mass-produced coffee brands like Luckin and Kudie, due to rapid expansion and a breakdown in cash flow (including unpaid wages and debts of over 20 million yuan to suppliers). This incident highlights the challenges faced by the premium coffee model, which relies on high prices and a strong customer experience, in the face of competitive pricing strategies. The industry must shift towards differentiation if it is to survive.
I. Seesaw: From Online Stardom to Bankruptcy
Seesaw was one of the first premium coffee chains established in China in 2012, gaining popularity with its innovative “new tea-style” coffee (such as milk frothy drinks and fruit-flavored options) and its industrial-style stores. It received funding in 2017 and further investments from companies like Xicha and基石 Capital between 2021 and 2022, reaching a peak of nearly 200 stores.
But the company's fortunes took a sharp turn in the second half of 2023: it began to close stores and focus on markets in East China and first- and second-tier cities. In the second half of 2024, reports emerged of unpaid wages and debts to suppliers, and the founder, Wu Xiaomei, faced travel restrictions. By 2025, two suppliers filed for bankruptcy due to Seesaw's inability to repay its debts. Currently, Seesaw is involved in 107 legal cases, mostly related to debt collection (suppliers and bank loans), with total amounts exceeding 20 million yuan. The court has initiated the bankruptcy process, and the first creditors' meeting failed to produce a resolution.
II. The Price War as the Final Straw
Two rounds of price wars by fast-food coffee brands directly impacted the survival of premium coffee:
1. Low-price competition: In 2023, Kudie introduced 9.9 yuan coffee, followed by Luckin, with delivery platforms offering additional discounts, pushing prices down to as low as 5-6 yuan per cup. Premium coffee from Seesaw, costing 30-40 yuan per cup, was naturally less attractive to consumers.
2. Product appeal to Chinese tastes: Fast-food coffee brands also focused on creating drinks that catered to Chinese preferences, such as coconut milk lattes with a sweet and non-acidic flavor, quickly gaining popularity among the general public.
3. Scale advantage: By 2026, Luckin had over 33,000 stores, more than 160 times the number of Seesaw's peak, providing widespread coverage and making it harder for premium coffee to establish its “third-space” (a cozy place to enjoy coffee) as a unique selling point.
III. Seesaw's Own Mistakes
While external factors played a role, Seesaw made several critical mistakes:
- Rapid expansion: Opening nearly 200 stores was impressive, but premium coffee is costly to produce (high-quality beans, stylish stores, and trained baristas). The rapid growth overwhelmed its management and funding capabilities, leading to financial difficulties.
- Cash flow crisis: Debt to suppliers began in late 2023, with repeated failures to repay payments, even affecting employee wages, indicating a severe lack of funds.
- Failure to adapt: While other brands were innovating with milk tea-style drinks, Seesaw clung to its premium image, failing to adjust its products to meet consumer demands and experiencing significant customer loss.
IV. The Entire Premium Coffee Industry in Trouble
Seesaw is not the only brand facing challenges:
- Tims Tianhao China: Its revenue decreased by 5.4% in 2025, resulting in a net loss of 440 million yuan, and store growth slowed. It once thrived with its “bagel + coffee” combination but struggled under the pressure of low-priced competition.
- Independent cafes: Many independent premium coffee shops are struggling, with fewer customers and unsure how to compete with fast-food brands, leading some to closure.
This indicates that the high-price, premium experience model is no longer competitive in a market dominated by low-priced, mass-produced coffee.
V. Is There a Future for Premium Coffee? Experts Suggest Three Approaches
Industry experts suggest that premium coffee brands should avoid price wars and instead focus on differentiation:
1. Niche quality: Focus on a smaller, more specialized audience by highlighting the origin of beans (e.g., Ethiopia, Colombia) and emphasizing artisanal roasting techniques to create unique products that consumers are willing to pay for.
2. **Enhance the “third space”: Transform stores into unique environments, such as quiet workspaces or literary reading corners, to attract customers with specific needs (freelancers, students).
3. Targeted markets: Develop low-calorie coffee options for fitness enthusiasts or custom-made coffee for office workers, thus avoiding direct competition with fast-food brands and targeting niche customer groups.
In short, premium coffee brands need to move away from the goal of becoming large and dominant and instead focus on delivering a unique, high-quality experience.
Conclusion
Seesaw’s bankruptcy marks the beginning of a “price war elimination process” in the coffee industry. Fast-food coffee brands are dominating the mass market with their low prices and scale, while premium brands must find their own distinct value to survive. The future coffee market will likely split into two camps: one focused on affordability and convenience, and the other on quality and experience. The middle ground will become increasingly challenging for traditional premium brands.