On April 18, a number of consumers posted a list on social media, and the current price of Luckin Coffee's "Coconut Cloud + Thick Milk" package was only 6.5 yuan. Luckin Coffee officially said that this was caused by the allocation of personnel in Luckin's internal operations, and the store was temporarily closed. This move once again sent Luckin to Weibo hot search.
It is reported that the coconut cloud latte mentioned in this product is a joint model of its recent cooperation with the Coconut Tree Group, and has recently been screened on various social platforms. Blue Whale TMT reporter learned from Luckin that the joint product "Coconut Cloud Latte" took more than 120 days to prepare from product to marketing.
Luckin, which is good at marketing, seems to make consumers forget the previous financial scandals. On the same day as the official announcement of coconut trees, on April 11, Luckin announced that it had successfully completed its debt restructuring and officially concluded the bankruptcy protection process. For Luckin, the real test at the moment is, when will it be able to make a profit after the loss is narrowed?
The joint coconut tree fire out of the circle, Luckin relies on earthy marketing to harvest traffic
According to Luckin Coffee's official Weibo, as of April 17, coconut cloud lattes had sold more than 4.95 million cups, with a total sales volume of more than 81 million. According to this calculation, since the release of the new product on April 11, the average daily sales of coconut cloud lattes have exceeded 700,000 cups.
On social platforms, many netizens have bought coconut cloud products by posting orders, and pointed out that "the extreme soil is the tide". In addition to Luckin's continuous marketing campaign, this joint branding is also related to the brand impression of coconut tree itself.
On April 8, Luckin said through Weibo, "Countdown to 3 days! This cooperative brand is the first joint name in 34 years", although the picture is vague about product information, but the color matching is reminiscent of coconut trees; on April 9, Luckin revealed that "this new product really has two layers"; on April 10, it is even more bold that "the next 100 million small target is in front of us".
After three consecutive days of publicity, on April 11, Luckin released a new product "Coconut Cloud Latte" and announced 2 limited paper bags and 1 cup cover. At the same time, Xu Dongdong, the spokesperson of the coconut tree, posted a blog to create a topic, and the designer Pan Hu posted: "I don't pretend, I did it!" ”
The simple and rough typography design and the contrast aesthetic of "willful arrogance" allow consumers to feel the earth tide temperament of coconut clouds, and this earthy marketing is actually Luckin's "planned for a long time", which was the first anniversary of the listing of raw coconut lattes.
Yang Fei, co-founder and chief growth officer of Luckin Coffee, said that Luckin's new raw coconut latte last year became a phenomenon-level explosion in the coffee market once it was listed, and as of now, the sales of single products have exceeded 100 million cups. Luckin has discussed internally, what products can be launched on top of raw coconut to taste better? Therefore, based on product and technological innovation, and based on the characteristics, symbolism and user identity of both sides of the brand, Luckin chose to link up with Coconut Tree Dream.
This is not the first time that Luckin has relied on "precautionary" marketing methods to harvest traffic. On September 3, 2021, Luckin officially announced that Gu Ailing was the brand spokesperson, and there were nearly 5 months before the Winter Olympics. During the Winter Olympics, Luckin Official Bo frequently updated Gu Ailing's competition, and with the explosion of the Frog Princess, Luckin successfully mastered the traffic password.
Luckin, which is good at making terriers, seems to have made consumers forget about the previous financial scandals, and officially ended the bankruptcy protection process after the loss narrowed.
When will the bankruptcy protection process officially end and the profit will be made after the loss is narrowed?
On the evening of April 11, Luckin issued an announcement that according to the provisions of Chapter 11, Chapter 15 of the United States Code, Luckin Coffee Company has successfully completed the debt restructuring, and with the support of creditors, the company has officially ended the bankruptcy protection process as a debtor.
Guo Jinyi, Chairman and CEO of Luckin Coffee, said: "Today marks a new beginning for Luckin Coffee, which used the Chapter 15 procedure to achieve a restructuring of its financial liabilities in the United States. As we have successfully navigated this process with the support of our creditors, we believe Luckin Coffee is well positioned for long-term growth and the creation of stakeholder value. ”
According to luckin coffee's 2021 financial report, for the whole year of 2021, Luckin's total net income was 7.9653 billion yuan, an increase of 97.5% year-on-year; the operating loss under non-U.S. accounting standards (Non-GAAP) was 236.3 million yuan, while the loss in fiscal 2020 was 2.4938 billion yuan, a loss narrowed by 90.5%.
By the end of 2021, the total number of Luckin coffee stores has reached 6024, including 4397 self-operated stores and 1627 associated stores. At the same time, Guo Jinyi previously revealed in an internal letter that in January 2022, Luckin achieved a total of about 360 new stores, refreshing the record of the total number of new stores opened by Luckin in a single month.
The narrowing of losses and the expansion of stores seem to have brought the reef-ridden Luckin back to shore, does this mean the beginning of a new journey for Luckin?
Li Xinyi, an analyst in the brand retail industry at Analysys, said that behind the multiple signals such as narrowing losses and debt restructuring, Luckin is abandoning its negative burdens in the past and greeting the future with a new look, which will help Luckin gain more confidence in the capital market.
According to the financial report, in 2021, the revenue of Luckin's self-operated stores was 6.1927 billion yuan, an increase of 78.3% year-on-year, and the profit at the level of self-operated stores turned positive for the first time, reaching 1.2528 billion yuan. Despite this, Luckin has not yet achieved full profitability, and how to compete with similar brands in the case of reduced coupons is a problem that needs to be considered.
According to the data, on March 1, Manner announced that it will open more than 200 new stores in 10 cities in China at the same time, including Shanghai, Wuhan, Nanning, Haikou, Chengdu and other cities; at the same time, on March 10, Tims China announced that it has received $194.5 million in financing, and currently has more than 410 stores in the Chinese market.
In 2021, a total of 113 new products were launched, and more than 200 user complaints were received in the past month
Li Xinyi believes that at present, in the echelon of affordable coffee, Luckin already has a certain brand effect, and if the scale advantage and brand effect can be transformed into supply chain advantages in the future and further reduce costs, there is a great opportunity to win in cheap coffee.
In 2021, Luckin's total operating expenses reached 8.5 billion yuan, an increase of 28% year-on-year. Among them, the material cost reached 3.198 billion yuan, accounting for 37.6% of the total operating expenses, which was the main cost expenditure; at the same time, the store rent and other operating costs reached 2.037 billion yuan, accounting for 23.9% of the total operating expenses.
According to Guo Jinyi's previous internal letter, Luckin launched a total of 113 new ready-made drinks in 2021. According to this calculation, the average monthly new products reach about 9. However, behind luckin's frequent new products, consumers have mixed reviews of the new products it has launched.
Taking the explosive coconut cloud latte as an example, although it has achieved good sales results, there are still some consumers who believe that the taste of its new products is not prominent, and marketing success is the key. Zhang Qing (pseudonym) told reporters, "The coconut cloud latte is too greasy, and the taste of coconut palm juice drink covers the original coffee flavor, which is not so stunning, better than the design."
Li Xinyi pointed out that the taste of consumers themselves is changeable, and it is difficult to adjust the mouth, and it is difficult to absolutely judge the taste of a product. But precisely because consumer tastes are changeable, one of the core capabilities for beverage brands is to continue to develop new flavors to meet consumer needs, if you can develop a certain explosive flavor and continue to lead this taste, it is a good way for brands to seize consumer minds and expand brand influence.
On the Black Cat complaint platform, frequent complaints from consumers have become a major challenge for Luckin to build market trust. The reporter searched for "Luckin" as a keyword and found that the number of related complaints in the past 30 days reached 214, and the completion rate was only 30%. Complaints include objections to the use of coupons, foreign objects in drinks, and difficulties in refunding order cancellations.
It is worth noting that with the explosion of the coconut cloud latte, Luckin also launched the raw coconut freedom card. According to reports, the price of 30 days of coconut cards is 9.9 yuan, and the price of 90 days is 19.9 yuan. When the user opens for the first time, he can enjoy the right to purchase 1 cup of designated ready-made drinks at a preferential price of 10.9 yuan, and the subsequent period (30 days) can enjoy the right to purchase 6 cups of 18 kinds of designated ready-made drinks at a preferential price.
However, some consumers reported that there is a problem that the information prompts of such cards are not in place. On April 18, a user launched a complaint that when he bought coffee on the Luckin Coffee APP on April 15, there was a large advertisement for a free card, but after the purchase, he found that he opened the raw coconut free card by default, and could only drink the raw coconut series and all of them were sold out, and could not find a refund route. At the same time, it pointed out that this information is very misleading, and the purchase of other drinks (to enjoy discounts) requires a re-purchase of the Luckin Freedom Card, but there is no information prompt throughout the process, and it will only be found after payment.
The reporter checked the APP and found that the Luckin Freedom Card was 9.9 yuan per month continuously, and the price for 30 days was 15.9 yuan. When the user opens it for the first time, he can enjoy the right to purchase 1 cup of designated ready-made drinks at a preferential price of 10.9 yuan, and then he can purchase 8 cups of 23 kinds of designated ready-made drinks at a preferential price, mainly coffee drinks.
This is not the first time that Luckin has been involved in controversy due to the way of playing with category coupons, while playing with trick marketing and constantly harvesting traffic, how to consolidate consumer loyalty is also a problem that Luckin needs to think about when it moves towards a new beginning.