Produced by Radar Finance and | Li Yihui, ed. | Deep Sea
"Coconut cloud latte, drink from small to the atmosphere", "taste soaring to the sky, plus ice race fairy"... On April 11, Luckin Coffee and Hainan Coconut Tree Group both officially announced the launch of a joint product, Coconut Cloud Latte. Some netizens sighed that the combination of the two, the surface of the earth can no longer hold them.
In line with the taste innovation, Luckin also designed a cup bag and cup sleeve with the classic PPT style of coconut tree for the coconut cloud latte. On platforms such as Weibo and Xiaohongshu, related topics have been surrounded by the coconut tree wind of the soil tide, and some netizens said, "Good soil, soil I can't refuse." ”
The coconut cloud latte that triggered the boom achieved good sales. At 9 o'clock on April 12, Luckin Coffee issued an announcement that the single store sales of coconut cloud lattes on the first day exceeded 130 cups, and the total sales volume has exceeded 660,000 cups.
While playing with cross-border marketing, Luckin has just announced that it has completed the financial debt restructuring and completed the Procedures under Chapter 15 of the U.S. Bankruptcy Code, so that the Company is no longer subject to bankruptcy or bankruptcy proceedings in any jurisdiction. According to Guo Jinyi, co-founder and chairman of Luckin Coffee, this marks a new beginning for Luckin Coffee.
The other side of the joint name, The Coconut Tree Group, seems to intend to carry out the product packaging and "edge ball" advertising campaign of the "mudslide" aesthetic to the end. Just on April 12, taking advantage of the popularity of the joint signature with Luckin, Coconut Tree Official Micro played an advertisement of "training the deputy general manager and re-enrollment".
Why coconut trees?
In terms of product marketing, Luckin always gives people the feeling of being superior. From inviting "Creation Camp" player Li Luxiu, who "doesn't want to go to work", as a summer ice café recommendation officer, to "betting" on Olympic champion Gu Ailing in advance, every topic marketing can always set off a wave of discussion on social platforms.
According to Luckin Coffee's 2021 fiscal year report, Guo Jinyi disclosed that Luckin Coffee launched a total of 113 new ready-made drinks in 2021.
Under the blessing of marketing, the Luckin raw coconut latte launched in March last year has become a phenomenon-level explosive product, and even set a record of more than 10 million cups sold in a single month when its popularity was at its highest. On the evening of April 6, Luckin's official Weibo announced that the raw coconut latte had achieved sales of 100 million cups on the first anniversary of its birth.
Some analysts believe that whether from the perspective of driving performance growth or shaping brands, coconut-related coffee products have become a key big item of Luckin. Even driven by Luckin Coffee, new tea brands such as Xicha, Lele Tea, and Chabaidao have launched raw coconut series products.
Along the path of raw coconuts, from product research and development to marketing preparations, Luckin spent another 4 months to upgrade its products. Finally, through the so-called "original Luckin coconut cloud process", the raw coconut series of coconut cloud latte was launched.
Yang Fei, co-founder of Luckin Coffee and CGO (Chief Growth Officer), introduced in an interview with Morketing that at the level of product innovation, coconut cloud lattes have added coconut water, and through the "ring molecular embedding technology" to replace conventional milk caps, 0 lactose, 0 vegetable fat powder, in line with the current health trend.
With the birth of new products, this time Luckin chose the cross-border marketing game. The joint target is the Coconut Tree Group, which claims to be the first cross-border in 34 years, and is officially called "two brands that play coconuts".
Yang Fei said that there are two principles of Luckin cross-border marketing, one is tonal extra points, such as light luxury, fashion, and fashion brands; the other is interactive and interesting, contrasting, strong topic, fun. This time it was the latter.
"Too 'smooth' is often not marketing, 'shun' is the norm, marketing sometimes has to pursue contrast, this contrast can bring a large number of users to actively spread, that is valuable." Yang Fei further explained.
Different brand tones, fresh design and copywriting are one of the manifestations of this contrast. For example, the cup cover and the wrapping paper bag of the coconut cloud latte are printed with the iconic "mudslide" style design of coconut palm juice.
Coconut Tree's famous slogan "from small to large", after the joint name was changed to "drink from small to the atmosphere", the relevant copywriting was densely written on the outer packaging belt, which was unforgettable.
And if the contrast between the two brands is greater, the greater the topicality that will eventually arise, and the more frequent consumption will be brought, driving new consumer groups and harvesting out of the circle traffic.
This kind of opportunity to increase traffic realization through joint branding, Professor Zhang Lei of the School of Humanities of Zhejiang University of Technology made an analysis from the perspective of economics, he pointed out that the consumer groups of most cross-border joint goods are not completely overlapping.
For example, as an old brand, coconut juice wants to "break into" the young people's group, it needs to co-brand with products such as coffee that are closely related to young people; Luckin wants to break through from many coffee brands, and it is also very necessary to seize the opportunity to innovate.
In fact, judging from market feedback, the joint name of Luckin and Coconut Tree seems to have successfully attracted young people who are keen on fashionable punch cards, and this new packaging can now be seen everywhere in the circle of friends and Weibo.
As of 9 o'clock on April 12, Luckin Coffee issued an announcement, saying that the total sales of Coconut Cloud Lattes on the first day of the launch had exceeded 660,000 cups, and the sales volume of a single store exceeded 130 cups, which was also the strongest first-day single product king in Luckin's history.
For the cooperation between the two, the industry has also responded with an optimistic attitude, believing that the purpose of both sides is to take what they need.
Chinese food industry analyst Zhu Danpeng told Radar Finance that for Luckin is a differentiated marketing strategy, for The Coconut Tree, it can cooperate with such a big IP as Luckin, especially among young people with a very high brand recognition of the enterprise, for the rejuvenation of the entire Coconut Tree brand, as well as the young people's minds have a very good blessing.
"They are such a joint name, we are quite optimistic." In Zhu Danpeng's view, Luckin and Coconut Tree join forces to belong to a strong combination, and the two brands can achieve their own needs and integrate consumer groups, thereby promoting the development of enterprises.
Luckin has entered a benign development track
At the same time as the launch of new products, Luckin is gradually getting out of the "quagmire" of financial fraud in the past.
On April 11, Luckin Coffee announced on its official website that the company completed the financial debt restructuring and completed the procedures of Chapter 15 of the US Bankruptcy Law. As a result, Luckin Coffee is no longer subject to bankruptcy or bankruptcy proceedings in any jurisdiction.
The Company had previously been endorsed and executed under Title 11, Title 15 of the United States Code for the endorsement and execution of its Cayman Islands Arrangements Scheme, pursuant to which it had successfully restructured its financial obligations, the announcement said. There was no objection to the motion to close the Chapter 15 case, and the bankruptcy court issued an order approving the request on April 8, 2022.
Pursuant to the Order of the Cayman Islands Grand Court of 25 February 2022, the Winding-Up Petition (as amended) concerning the Company has been dismissed. The bankruptcy court's judgment marks the successful conclusion of Luckin Coffee's interim liquidation process in the United States.
The announcement shows that out of the bankruptcy proceedings, Luckin will be positioned for long-term sustainable growth and profitability, the company will no longer be bound by bankruptcy or bankruptcy proceedings in any jurisdiction, and the company will formally end the bankruptcy protection proceedings as a debtor.
"Today is a new beginning for Luckin Coffee." Guo Jinyi said, "We believe that Luckin Coffee has the conditions for long-term growth and continuous creation of value for shareholders. ”
According to the data, in May 2019, Luckin Coffee was listed in the United States, setting a new record for the world's fastest IPO. In April 2020, Luckin fell into crisis due to financial fraud, facing many problems such as debt and litigation, and suspended trading and delisted in June of the same year.
In December 2020, Luckin Coffee issued a statement saying it had reached a settlement with the U.S. Securities and Exchange Commission over the alleged financial fraud of some former employees.
In 2021, Luckin accelerated debt repayment and provisional liquidation procedures. In September of that year, the Company announced that it had signed a $187.5 million settlement letter of intent with the plaintiffs in the U.S. class action lawsuit and had formally submitted a debt restructuring plan to the Convertible Bond Creditors to the Cayman Court.
On December 1, 2021, Luckin Coffee announced that the $460 million convertible senior notes restructuring plan with an annual interest rate of 0.75% due 2025 was approved by the creditors' meeting.
At the end of January, with the completion of the acquisition of the equity of Luckin Coffee managed by KPMG, the custodian of the original fraudulent management debt, with the completion of the acquisition of the equity of Luckin Coffee, jointly with IDG Capital, the original fraudulent management's equity was also liquidated, and there was no longer any connection with Luckin Coffee.
On Feb. 3 of this year, the SEC filed a notice with the court acknowledging that Luckin Coffee's payment of cash to the company's securities holders through the scheme had met the penalty clause of the court's final judgment.
With the withdrawal from the counterfeiting storm, Luckin's company operation has also entered a benign growth track.
According to the 2021 financial report, Luckin's total net income was 7.965 billion yuan, an increase of 97.5% from 4.0334 billion yuan in fiscal 2020. The operating loss in fiscal 2021 was 539 million yuan, a significant reduction of 80% compared with 2.587 billion yuan in the previous year.
Among them, the company's self-operated stores turned losses into profits for the first time. The financial report disclosed that the profit of Luckin Coffee's self-operated stores reached 1.253 billion yuan in 2021, compared with a loss of 435 million yuan in the same period of 2020.
Thanks to the success of private domain marketing, Luckin's average monthly trading customers in 2021 were 13 million, but by the fourth quarter, the average number of monthly trading users increased by 67.1% year-on-year to 16.2 million, setting a record high for the company.
In this context, Luckin has also changed the previous cautious pace of expansion and restarted the franchise policy. According to the data, in January 2022 alone, Luckin achieved a total of about 360 new stores, refreshing its record of the total number of new stores opened in a single month.
By the end of 2021, the total number of Luckin stores has reached 6024, including 4397 self-operated stores and 1627 associated stores, and the total number of stores has exceeded Starbucks.
Most of the 753 franchise stores added in 2021 are from the sinking market. According to Times Finance, Luckin's franchise threshold is 400,000 yuan, and "the county boss is waiting in line."
The reason behind this is that the advantages of brand and price make Luckin popular with small-town youth. Reflected in the revenue data, the revenue of Luckin franchised stores in 2021 was 1.306 billion yuan, an increase of 312.5% year-on-year, and the growth rate far exceeded the 78.3% of self-operated stores.
However, what lies in front of Luckin is still a loss, and the coffee track is becoming more and more crowded. Being able to open the situation in the sinking market is certainly an advantage, but the drawbacks of franchise stores are also obvious, if it is difficult to achieve the unity of service and quality, it may bring harm to the brand.
"Advertising world mudslide" coconut tree
On the other hand, although coconut tree group has a history of 34 years, its strongest sense of existence is not the product, but the wave of advertisements called "mudslides".
Public reports show that coconut tree group has repeatedly caused controversy due to advertising out of line. As early as 2009, the company was ordered by the local industry and commerce department to stop immediately and impose a fine of 1,000 yuan for using advertising words such as "papaya is full and I am plump" in the advertisement.
In 2019, coconut palm juice was replaced with new packaging, continuing the previous hot and spicy beauty pictures with advertising slogans such as "drinking from small to large" and "drinking coconut water every day can make breasts full", which was accused of being vulgar and false propaganda.
On March 27 of the same year, the Industrial and Commercial Bureau of Longhua District of Haikou City made a penalty decision, fining the Coconut Tree Group 200,000 yuan for obstructing social public order and violating good social customs.
The advertisement was punished for "wiping the edge ball", and the Coconut Tree Group was accused of misleading social value orientation.
On March 25, 2021, Coconut Tree Group published an advertisement on its official Weibo that "Coconut Tree Group trains the re-enrollment of the school of the head and deputy general manager", and the copywriter said that "there is a car, a house, a high salary, and there must be beautiful women and handsome men chasing", causing controversy.
At that time, the relevant person in charge of the company responded that the treatment and training mechanism mentioned in the advertisement were real, "there is no false publicity"; the relevant color matching and slogan continued the consistent style of Coconut Tree, and Coconut Tree Group "is not hyping".
However, on June 9, 2021, the Hainan Provincial Market Supervision Bureau issued a public announcement of the results of the administrative penalty, and the advertisement was fined 400,000 yuan for "obstructing social public order or violating good social customs".
However, on the morning of April 12, the Coconut Tree Group hung the same advertisement on the official Weibo, and a netizen at the bottom commented, "Remember that this suspected advertising violation has also caused controversy, but you are really tough!" ”
According to official information, Coconut Tree is quite proud of this kind of marketing method.
On January 29, Coconut Tree Group released the "Good News", which mentioned: In 2019, the "I drank from a young age" coconut brand coconut juice advertising storm and the 2021 Coconut Tree training professional manager student enrollment advertising storm successfully coped with decisions, which attracted the attention of more than 500 million netizens, once again enhancing coconut brand awareness and sales.
At the same time, the "report card" posted shows that the sales of coconut trees in 2021 increased by 16.82% compared with 2020, an increase of 7.71% over 2019, and an average increase of 12.26% in two years. According to the company's 2019 revenue of 4.328 billion, the revenue of Coconut Tree Group in 2021 is about 4.661 billion.
However, revenue has been hovering around 4 billion yuan for many years, and as a traditional beverage category, coconut trees urgently need to capture the hearts of a new generation of consumers. Some analysts pointed out that it remains to be seen how the joint effect with Luckin will be, but in recent years, new brands of plant protein and tea drinks have emerged in an endless stream, all competing for young people's consumption choices, and coconut trees are facing a more severe external competitive situation.
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