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Culture / Technology
Source: Technology Education
If it wasn’t for the return of coffee a few days ago, twitter once again aroused people’s endless recollection of this coffee brand founded in 2014. Most people would not even have thought that this company, which had once wrestled with Starbucks and lucky, once opened more than 400 offline coffee shops. Even coffee started with Starbucks and finally launched its own coffee brand Box, finally annihilated in the race with capital.
It’s hard not to lament the booming coffee market a few years ago. It’s really hard to understand why Chinese investors are so interested in imported coffee. However, it’s lucky to really carry forward the coffee category.
Of course, if a random friend asks you if you know what happened to Ruixing, the answer is “probably going out of business.”. In fact, even practitioners like me think so.
Since April 2, 2020, Ruixing’s revenue has increased by 2.2 billion yuan. Under the titles of “the biggest fraud scandal in the history of China capital stocks” and “the light of the nation, American leek harvester”, lucky coffee, which has been established less than three years ago, has experienced a series of experiences like riding a roller coaster.
Until June 29, lucky coffee suspended trading in the Nasdaq for record delisting. At that time, we all agreed that it was over. Ruixing was going to die.
Until a few days ago, I went to the tax office of Beijing Greenland center to handle tax. There was a lucky coffee next door. I opened the small program and found that I could not only place an order, but also had a lot of new flavors. So I was very curious to place an order. Although there was no 3.8% discount, there was no full price.
The whole process is very smooth: there is no jam for the small program to place an order, the store is in normal operation, and the meal code is pressed under the coffee, almost the same as before.
Is it that after five months, lucky hasn’t fallen? Even How are you doing?
It seems like this. Those friends who are expecting Ruixing to close down may have to wait.
In August, Ruixing held a meeting at its headquarters in Xiamen. At the meeting, Ruixing passed a group of data to the outside world: more than 4000 stores across the country were open as usual, more than 30000 employees arrived on time, and the number of new users continued to rise. In July, the cash flow of Ruixing’s single store had turned positive (except for more than 300 non operating University stores).
Lucky coffee management expects that the company will achieve overall profitability in 2021.
This means that Ruixing, who suffered from financial fraud and delisting, does not seem to be as unbearable as the outside world thinks. It has been five months since the fraud incident, and it can not be said that it has recovered from the dead, but it seems to be living well?
What’s the situation? What’s wrong?
A very important reason is that the management of Ruixing has changed.
In fact, since the suspension of the former CEO and coo. Lucky’s management has been in a state of constant adjustment.
On July 14, lucky announced a new executive: Guo Jinyi, who became acting CEO of lucky coffee after the fraud was exposed, was appointed as the chairman of the company and concurrently as the CEO.
Previously, the board of directors has announced that Cao Wenbao and Wu Gang have become directors of the company.
Cao Wenbao is an executive at McDonald’s, and Wu Gang was the executive vice president of China United Airlines. Yang Fei, the co-founder of Ruixing and CMO, now has another title. He is the head of the big growth center. He has taken part of the work of COO before. It may be more appropriate to call him CGO. This means that the entire management of lucky has undergone a great change of blood.
Guo Jinyi was one of the founders of Ruixing’s business model. He had been responsible for the product and supply chain before, and there were few opportunities for him to appear in the public. I searched Guo’s information and learned that he once worked in the transportation service department of the Ministry of transport.
Now that Guo is appointed in the face of crisis, the first thing to do is to stabilize the morale of the army, which can also be seen from his external posture: for example, at the mid year management meeting, Guo said that Ruixing’s first concern is “employees”, and the team is the most valuable asset of the enterprise.
Cao Wenbao, needless to say, was promoted to a director from McDonald’s. He was promoted to a director, obviously hoping that he would stabilize the operation and optimize the store. Before Ruixing’s crazy expansion, there were many stores with losses and weak single store profitability. Cao’s task is to slow down the rapid expansion strategy of the previously accelerated stores. If Ruixing is a car, Cao is “braking”.
For example, the closure of previously relatively poor stores, the adjustment of international business, and the unmanned retail strategy at the beginning of the year have all been suspended.
In fact, to put it bluntly, it is regarded as a business. If a store wants to make a profit, it must first be careful.
As a co-founder, CMO Yang Fei, who was mainly responsible for marketing brand marketing, took over the more important work of COO, taking charge of the whole brand, users and growth.
Yang Fei is indeed a good player in growth. In August 21st, Yang Fei made a blueprint in his circle of friends. The official account of the slide show exceeded 20 million. In the private sector, Rui was using the WeChat community to do community marketing. By the end of July, about 1800000 private domain users had been registered, 1 million 100 thousand of them had joined 9100 user welfare groups built around the stores, and the data was still in the form of The number of 600000 is increasing.
According to people close to lucky, the number of communities has now exceeded 13000.
Today’s Ruixing and the former Ruixing are two parallel worlds. One is burning money for expansion and falling into the whirlpool of capital; the other is becoming a businessman, calculating carefully, saving as much as possible, and cutting every cent.
The leading group after the exchange of blood belonged to the “pragmatic” group, and determined the strategic line of reducing cost and improving efficiency. Therefore, in the five months after the occurrence of financial fraud, Rui was “survived” and had a good life.
Is lucky up?
I don’t know if I’m up or down, but at least from the data released by Ruixing, it doesn’t collapse, and seems to be doing well: in July, Ruixing’s single store cash flow was positive, 90% of its stores opened, and its stable income was 13 million, and the overall profit was postponed to 2021. Secondly, in August, APP users exceeded 50 million, monthly consumption frequency of users increased by 30%, repurchase increased by 28%, and Mau increased by about 10%.
In the past, we always believed that the consumer group Ruixing finally attracted by reducing the discount level through fancy design was a group of extremely price sensitive users, which opened 4500 stores in two years. Finally, a group of customers who are highly sensitive to price are cultivated. So as long as the price changes, the group will drink Starbucks.
This is where Lucky’s business model has always been criticized – trying to spend 3 yuan to earn 1 yuan.
Ask the consumers who often buy lucky. In fact, since the beginning of this year, the price of Ruixing’s products has increased by 1 yuan, and the original 3.8% discount coupon is less. Instead, it is replaced by 4.8% discount coupon, allowance or full discount coupon.
It can be found that before the financial crisis, Ruixing has been reducing the subsidies. Then I can’t help but wonder why prices and subsidies can keep growing after the financial turmoil.
I think on the one hand, for consumers, the most concern is not financial affairs, but whether they can drink this cheap coffee.
On the other hand, Ruixing has changed its marketing strategy of advertising all over the world.
Since this year, the marketing and growth team led by Yang Fei has been expanding its private domain traffic. According to the data of the third party, in less than 20 days, lucky coffee has added 800000 private domain users, with a total of 2.6 million, and more than 9000 wechat communities. Therefore, these re purchases are likely to come from the operation of the community.
With the great change of management of Ruixing, Yang Fei, as the chief marketing officer, has also adjusted the marketing strategy. The overall marketing strategy of Ruixing has changed from expansionary fission to refined community operation, and the key of operation has changed from innovation to retention, and community is the best way to precipitate users and innovate.
Lucky’s community positioning is a welfare group, which is mainly operated through the store enterprise wechat. From the present point of view, the repurchase generated by the community is still good. In fact, the community has become the third largest consumption channel of lucky, the first is app, the second is small program.
In fact, it’s easy to understand that before many wechat groups, there were people who sent lucky to collect wool discount coupons, and Ruixing’s practice was to take this part of the community and traffic to do it on its own. Imagine that there is a group that doesn’t gossip at ordinary times, and only tells you what benefits you have today, and then issues discount coupons. The purpose of Ruixing is to sell coffee The purpose of users is to grab welfare, and both sides are willing.
Secondly, nearly 60 new products have been launched, including popular coffee, milk tea and various drinks, and even light food. The product line is constantly enriched. To tell the truth, I am quite surprised. I always thought that Ruixing has been in a long-term situation of being unable to make ends meet and operating miserably since the financial fraud door, and the employees are worried about whether the next month’s salary can be paid out Do you still have time and money for R & D?
This is not to mention the brand marketing activities of lucky co branding line friends and launching Haagen Dazs cooperative drinks in first tier cities. These familiar formulas and familiar tastes are really rare for lucky after financial fraud.
In order to verify my idea, I inquired about the payment collection of Ruixing with several suppliers that Ruixing had cooperated with. After all, it was true that we could not give money. The answer was beyond my expectation. At first, the company’s financial department was also worried about the payment collection problem, and was unwilling to accept it. Ruixing not only did not default on their payment, but also continued to place orders, and the payment collection speed was relatively fast.
According to my experience, once there is a problem in the operation of the company, it is first reflected in the payment collection, which is called interest free liability in accounting. For example, if the payment cycle is lengthened, and the approval is more strict and the amount of contract is relatively large, it will require more materials and qualification certificates, and even split into several payments to pay separately, so as to achieve the purpose of deferred payment. All these things I have experienced and said are tears.
If what friends say is true, then at least in terms of finance, lucky is not as bad as he imagined.
Ruixing’s successful hematopoiesis and short-term pain
Did Ruixing succeed in saving herself?
It is still too early to answer this question, but it is clear that lucky has been actively helping itself, but whether it can achieve full profit next year. I think there are several important points.
One is whether lucky’s supply chain and product R & D can remain competitive.
In fact, the biggest damage to Lucky’s financial fraud time is the brand image, but for the supply chain and product development, the impact is not very big. If Ruixing can continue to innovate in products and R & D, attract more young people’s attention through cross-border trends, and become the supreme in the beverage industry.
From the perspective of Ruixing’s previous methods, it started from coffee cross-border to deer tea, and now it has launched light food and desserts. In fact, the product span is very large. Ruixing carried out a wave of unmanned retail when the epidemic broke out at the beginning of this year. However, from the current results, the promotion of unmanned retail business is suspended, and the effect is not ideal.
Therefore, if Ruixing wants to continue to expand its product categories, the grinding requirements for the products in the supply chain will be higher.
But what’s better is that Guo Jingyi, the current CEO, was born in the supply chain and was relatively familiar with his car.
The second is the continuous mining of private domain traffic.
According to Yang Fei’s estimation, if there are 2 million people in the community, at least 70000 cups will be brought directly every day. If through the operation means again, it should be able to reach 100000 cups directly. Three million cups in a month.
The core purpose of why we want to change from issuing coupons crazily to building a community is to do preservation and repurchase. Because the community is built around stores, the consumers are relatively stable, and they have a relatively brand awareness of Ruixing, and it is easier to re purchase. Compared with the pure purchase of one free one, the performance price ratio is relatively higher.
If we change our thinking, if we just want to run a good digital beverage store, we should consider the location, flow of people, products and gross profit rate.
Compared with milk tea, the gross profit rate of coffee is not so high, but it is not low. If you just want to support the store, the difficulty of operation is not as difficult as imagined. It is just that the price earnings ratio or growth rate will return to the logic of traditional retail, and high-speed growth is unlikely.
To sum up, Rui Xing is not dead and still alive. I don’t know whether it will be better next year. But it can be clear that the good days of buying one free one and drinking coffee for 0 yuan are gone. However, the consumers did not stop buying and buying. Maybe the little blue cup won the consumers, and lucky still had a chance.
This article does not represent the author’s position