More than a month ago, Luckin Coffee released its third quarter 2021 financial report, which showed that Luckin Coffee's revenue in the third quarter of 2021 was 2.35 billion yuan, an increase of 105.6% over the same period last year, and the loss contracted sharply by 98.6%.
After the well-known wind and waves, Luckin not only climbed up, but also ran faster and faster, how did it do it? Industry insiders have done a lot of analysis.
In the "China City Chain Coffee Consumption Report" just released by CBN, Neisanjun found a more convincing answer.
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Now, how should we view Luckin?
First of all, two small things about Ruixing that have impressed Uchiha Jun recently.
Once I saw a video on Douyin, with more than 60 likes, more than 40 comments, and the video creators only had a few hundred fans. The author took this video outside a store in Nanyang City, Henan Province, with the title "Luckin opened to Nanyang, next time must go to taste it", there is no Qua Ruixing is delicious, just shoot a video punch card outside the store, lamenting that Nanyang has opened a nationally renowned coffee shop, Nanyang is developing really fast.
The comment content of the video is basically divided into two: "where is the store", "Nanyang is getting better and better", you can see that the comments are basically local people in Nanyang, there are no "coffee lovers" and market analysts in first-tier cities, but the recognition of urban development and the interest in coffee is obvious.
In such a coffee depression, Luckin and Starbucks are not much different for them.
The second thing is that in my hometown, in the south of The city of Fuyang, Anhui, there is also a café near the community, every time I go home, I will go there to drink coffee, I have always thought that such a café is difficult to survive in a small place, and it is more lively when young people go home during the Spring Festival.
In a chat with the store owner, I learned that they had not lived so well before. But from 2020 onwards, business is visibly getting better, in short, it can survive and make a little money. All these changes began after Ruixing drove to Fuyang.
The boss said that since Ruixing drove to Fuyang, young people began to contact coffee, and more and more people in the small town were willing to drink coffee, and his business became better.
I was surprised that I thought that Luckin's arrival would be a devastating blow to this kind of small shop.
Once "outlier", now "everyday"
China's coffee market is still very large, the Chinese coffee market presents a significant feature of "early development but fast development", according to the London International Coffee Organization data, the Chinese coffee market is expected to reach 1 trillion yuan in 2025. Predictions and reality will always be different, but one thing is certain, the future of the coffee market will be dominated by young people.
At this time, how should we look at Luckin?
In the "China City Chain Coffee Consumption Report" released by CBN, it compared the two largest coffee chain brands in China: Luckin and Starbucks. The biggest conclusion is that Luckin's age group is younger than Starbucks, and the proportion of 18-24-year-old coffee consumers in new first-tier cities and second-tier cities has reached more than 25%, while Starbucks's proportion is 12.04% and 15.72%.
Whether it is a first-tier city, a new first-tier city or a second-tier city, Luckin has more "student" groups than Starbucks.
▪ Picture from CBN "China City Chain Coffee Consumption Report"
Luckin is younger, luckin's customers are younger, this is an obvious conclusion. The coffee market and even the entire catering consumer market, the future must be led by young people, whether it is because young people love to drink coffee more and more, or young people will become the absolute main force of future consumption, seize the coffee brand of young people, it is possible to become the leading force in the coffee market.
Therefore, for Luckin, young people are the outlet that really allows the brand to "ride the wind".
The downwinder does not mean simply "riding the wind"
It's not easy to be liked by young people.
Once, in a conversation with a partner at a senior consumer goods investment institution, I asked him what he thought of the so-called moat of a retail business entity, because in our perception, a business model without a moat cannot be done, and it is easy to be replaced by larger capital and newer brands.
He asked me, what is the moat of Nongfu Spring? Water source? In fact, there are many better water sources. Marketing? To be honest, I don't think the marketing of Nongfu Spring is so good, and marketing is not a moat at all. Channels? And nongfu spring channel to do the same brand is not a hand can not be counted. What the hell is that?
It is a comprehensive ability, and the water source is indeed one of the selling points of Nongfu Spring, but in addition, the combination of various factors such as water source, channel, marketing, and founder's decision-making is the key to the success of Nongfu Spring.
Why is Luckin younger and more popular with young people? Nor is it something that can be analyzed and understood by one aspect.
The first is the product level, which is led by a young team, newer and faster, and more diverse.
In order to meet the freshness of young consumers and the pickiness of taste, Luckin's R&D team has maintained a high-frequency speed and a rigorous tasting process. Taking ready-made drinks as an example, a total of 77 new products were launched in 2020, and more than 50 new products were launched in the first half of 2021 alone.
The high standards and speed of product development have led to continuous explosions. Since its launch in September 2020, the thick-breast latte series has sold 31.6 million cups during the year, accounting for 20% of annual sales. In April last year, the newly launched raw coconut series achieved sales of more than 10 million cups in June alone, and Luckin's profitability in May and June was not unrelated to the explosion of this series.
The brand of young people, so for young people to take a stand
One consensus is that a new generation of young people is becoming more and more individualistic, and as a result, they will prefer brands that show a distinct personality, and they hope to help them say "who I am" through these brands.
So how do you communicate effectively with young people? In a word, there is an attitude to play terriers. Nowadays, the values are gradually diversified, and the "personality" preferred by each young person is different, cool, witty, high-level humor, gentle but firm... Each style type can find its own audience. But to say that the type with the widest audience, I think it must be a "playful meme with attitude", and attitude and humor are indispensable.
Taking luckin's cooperation with Liluxiu last May as an example, it is true that the essence of youthful communication is played clearly. Li Luxiu, who debuted in the talent show "Creation Camp 2021" at the beginning of the year, is known as the "son of the elect", and has won the love of many young audiences with his authenticity and appearance. He was originally the Chinese teacher of two Japanese contestants, and he accidentally participated in the competition because his appearance was matched by the program group.
He was originally not in the show business circle, so the whole game was often a mournful look that just wanted to get off work quickly, and he regularly advised fans not to vote for themselves. But in order not to delay the results of his teammates, he will try to practice singing and dancing that he does not like. LiLuxiu's performance is very much like the working attitude of a new generation of young people in the workplace - he does not have much love for his work, often spits out, and when he leaves work, he is overflowing with joy, but he still tries his best to do what he should do.
The interesting creative advertising content in this advertising film has been on the hot search of YYDS several times, and the number of videos played on the whole network has exceeded 10 million, and the number of Weibo-related topics read has reached 140 million. The circle out of multiple social media platforms has also strongly boosted the sales of raw coconut lattes nationwide.
The cooperation between Luckin and Liluxiu has been very successful, first, because it is very compatible with its own brand tone and target audience. Yang Fei, co-founder of Luckin Coffee and CGO (Chief Growth Officer), has clearly mentioned the three keywords of Luckin's brand image: professional, young and fashionable. While ensuring the professional tone of the coffee brand, Luckin's social communication style has always been quite interesting. This can be clearly felt from the daily updates on Luckin's major social media accounts.
The second is to fully retain the spokesperson's own style + fans like the stem. Luckin's advertising planning is very to the itch of fans and melon-eating netizens - concise copywriting, YYDS stems, after work, "bamboo shoot tea party" live broadcast, etc., because the fan fun left a lot of space for secondary creation, and finally achieved a very good topic effect.
In the upcoming sports year, Luckin locked the 18-year-old freestyle skiing world champion Gu Ailing as the brand spokesperson early, and jointly issued the brand declaration of "young, you want Luckin" to further shape the brand image of rejuvenation.
Trusting young people's "decisions"
It is worth mentioning that the reason why Luckin's products and brand building can be so in line with the psychology of young people has a lot to do with the relatively high proportion of young people in their team and the young mentality of core executives, and in a large number of reports on Luckin in the past, I have noticed some relevant details:
Luckin employees are mostly young people, coffee is delicious and bad, let young people judge it themselves. Luckin will go through many internal tastings every time it develops a new product, and some Luckin employees said that "the tasting of a new product is divided into many times, such as the final finished product is matcha Rena Ice, which may only be tasting matcha at the beginning." ”
Responsible for product system and supply chain management is Senior Vice President Zhou Weiming, who has worked for meituan, Yum Restaurant Group, Coca-Cola and other well-known companies. Although he is an old cannon who has been in the industry for more than 20 years, Zhou Weiming knows that only young people understand young people best, so he lets the young product team decide which new product to go on, and he plays the whole process experience from product design innovation to supply chain listing, from laboratory, factory construction and management to customer service, to escort young people.
What is valuable is that Luckin's executives can not only delegate power to young people, but also play with netizens very groundedly. Because the raw coconut latte is too hot, many netizens complain that they are always out of stock. Luckin's official Weibo followed up in time and eased the dissatisfaction of netizens with just the right humor.
▪ The picture is from Luckin's official Weibo
In addition, what many people may not know is that Guo Jinyi, the CEO who manages more than 5,000 stores of Luckin today, is actually a post-80s. Among the enterprises of the same size, it can be said that they are very young.
Focus on the needs of young people
As young people who have grown up with the mobile Internet, they value the "convenience" of services more than the previous generation. Luckin has transformed the coffee consumption experience with Internet thinking, such as making efforts to realize "online point, on-site pickup"; providing takeaway services at the beginning of its establishment; scientific site selection, opening stores in areas where young people gather to live, work and study, meeting the convenience of 5 minutes of coffee there.
The 3-kilometer office building near the Luckin storefront is also called "Rui District Building" by young people, and the common characteristics of Rui District Building are: there are many young groups nearby, and there are many office buildings where young people gather, and these areas are also unplanned areas of Starbucks.
Take Luckin's store strategy in Shanghai as an example. The above-mentioned report released by First Financial Economics also shows that 50% of Luckin's stores in Shanghai are open in areas not covered by Starbucks. A large part of this is also an area where more young people are willing to choose and live than in the city center, which has a higher cost of living.
The third quarter of 2021 financial report shows that Luckin has begun to enter the era of profitability, store growth, product innovation has steadily advanced, and marketing has also changed the previous style and entered refined and young communication.
All this, as if everything returned to tranquility after the storm, sunshine, rainbows, Ruixing is once again on the road of self-development.
I am thinking that luckin's rejuvenation is a multi-dimensional synthesis of brands, products, teams, stores, etc., and it is not something that brands can imitate casually, which is Luckin's own moat.
Coffee is becoming a favorite drink of young people, and Luckin is a downwinder, but who knows that this wind is not borrowed by Luckin itself?