Signing Gu Ailing made Ruixing fire, will it be listed again in the future?

(This article is the original manuscript of Zijin Finance, please indicate the source when reprinting)

In the final of the Winter Olympic Freestyle Ski Jump, Gu Ailing made a 1620 grab in the third jump that had never been tried before, and won the highest score of 94.50 in the whole game, with a total score of 188.25 to beat many good players and win the championship in one fell swoop! This is Gu Ailing's first gold medal at the Olympic Games and the first gold medal won by the Chinese team in the snow sports of the Beijing Winter Olympics.

On the day of the gold grab, most people were at work, but the ski "genius girl" held the golden ice pier that everyone dreamed of, or through multiple channels such as push, circle of friends, and community.

After winning the championship, Gu Ailing became the top stream of attention from all walks of life. Brand owners have taken action, rubbing the heat to follow up the publicity, Luckin Coffee took advantage of the hot iron to launch the spokesperson Gu Ailing recommended coffee, the explosive model in a number of stores quickly sold out.

And more people, on the social platform set off a wave of drink fever: many people posted the "Gu Ailing cup cover", refueling straws, etc. to celebrate, and netizens said: "There are many people in line, and they can't order it at all." ”

Almost no one imagined that Luckin Coffee, which has been questioned for its financial fraud, would return to the public eye in this way. At this time, Luckin was not only lucky to sign Gu Ailing, but after the counterfeiting, Luckin experienced a series of twists and turns, and finally cut with the past with the courage of a broken wrist.

So the question is, in the future, how many stories can Luckin Coffee tell?

Lucky Lucky

Luckin still has a story, such as signing Gu Ailing. According to the data, Gu Ailing became the spokesperson of Luckin Coffee in September 2021, when Gu had signed a number of brands.

According to industry analysts, the beginning of 2021 is the peak period for Gu Ailing to win gold, and it is also the first watershed in endorsement fees. She continued to set new records in snow sports in China at X Games World Extreme Games and freestyle skiing world championships. Companies signed her before or after, and the endorsement fee varies greatly.

In 2019, the company looked for Gu Ailing to endorse, and the endorsement fee was 1 million US dollars / year, equivalent to more than 6 million yuan. Now, the cost of a new endorsement by Gu Ailing is about 2.5 million US dollars after tax, which is equivalent to more than 15-20 million yuan. In this way, the cost of Luckin signing endorsements will not be too low, but it is not a peak.

For the signing of Gu Ailing, the head of marketing of Luckin said that Gu Ailing and Luckin are very compatible: professional, young, fashionable and healthy. We are confident that she will make a historic breakthrough in 2022. At the same time, our ideas are set very quickly. To be young is to do 99% of the effort, and 1% to luck. Contemporary young people, and people with a young mentality, as long as they are enthusiastic, serious, hardworking, professional, and love life, luck will surely come.

Luckin Coffee is obviously fully prepared for this signing.

When signing the spokesperson, Luckin launched The Valley Ailing customized new Luckin Walden ski latte and blue velvet snow latte; before the Winter Olympics, Luckin Coffee launched the Valley Ailing Cup Cover, with the Gu Ailing element of the straw standing, the store installation humanoid standing, and also arranged 2 Gu Ailing pop-up theme stores in Beijing

During the Winter Olympics, Luckin was deeply bound with the spokesperson Gu Ailing, and with the progress of the Beijing Winter Olympics schedule, Luckin carried out a series of game warm-ups and countdowns for Gu Ailing on the official Weibo, using the "star chasing" method to publicize, and gained a lot of attention and favorability.

Luckin has adopted an online and offline linkage method, which is highly efficient. Soon after Gu Ailing won the championship, many people received Luckin's "championship ticket package". Luckin also added a special "Gu Ailing Recommendation" menu bar to the Mini Program, in addition to sending coupons, photo activities and so on.

Luckin also launched a photo award activity on Weibo, saying that with the topic of #Gu Ailing endorsement Luckin Coffee, there is a chance to get Gu Ailing's autograph, which stimulates the sharing enthusiasm of netizens and brushes up on the sense of existence.

Luckin's marketing director said that Luckin had stockpiled a number of sets of materials years ago. Before the Spring Festival, the store image sign was also arranged, and the cup set cup bag materials were also arranged. Including in the theater and Focus, two sets of materials were also prepared to achieve the material switching within 1 hour after winning the championship. After Gu Ailing won the championship, the Luckin team quickly spread the stored materials and materials in their own traffic pool.

Better a finger off than always aching

It can be said that signing Gu Ailing is a successful marketing battle for Luckin. But even so, luckin's most remembered label is financial fraud.

I have to say that Luckin is a magical company. After the financial fraud incident, many people think that it is only one step away from bankruptcy and liquidation, where to think, although Luckin is in the capital market, it is also infamous in the investment circle, but it has a lot of support in the private sector, such as "cutting American leeks to invite Chinese people to drink coffee" The argument is widely spread.

This really made luckin coffee investors smile bitterly.

In the eyes of industry insiders, after the financial fraud incident, Luckin's progress on two points has attracted much attention from the outside world. The first is whether it can maintain the continuity of existing store operations and achieve self-hematopoiesis; the second is how to deal with executives involved in financial fraud, and whether corporate governance can be benign.

According to Luckin's third quarter financial report released in December 2021, the total net income of Luckin Coffee in the third quarter of 2021 was 2.3502 billion yuan, an increase of 105.6% over 1.143 billion yuan in the same period last year, and the total revenue increased significantly; the net loss was 23.5 million yuan, a decrease of 98.6% year-on-year; the average monthly trading customer was 14.7 million, an increase of 79.2% year-on-year; and the profit margin of store operations increased to more than 25%.

In terms of corporate governance, Lu Zhengyao and Qian Zhiya, who were involved in financial fraud, have been removed from their posts but have been seeking to regain power. The Lu Zhengyao faction even set off a power grab war with guo Jinyi, the current CEO who is supported by the capital side.

But such disputes and filthy things finally show signs of cutting off from the past.

On January 27, Dapu Capital announced that the buyer's consortium led by it had acquired a total of 384 million shares of Class A common shares from Lu Zhengyao, former management of Luckin and Qian Zhiya affiliates, and obtained more than 50% of luckin's voting rights and became the actual controller. This means that Lu Zhengyao may officially withdraw from the Luckin equity war, before that, after being "kicked" out of the board of directors by Dapu Capital and others in 2020, Lu Zhengyao has never stopped "counter-attacking".

Capital has always been ruthless. Resolutely cut with Lu Zhengyao, Li Hui of Dapu Capital and Liu Erhai of Joy Capital, once a good friend of Lu Zhengyao, the cooperation of the "Iron Triangle", has successively sent companies such as Shenzhou Car Rental, Shenzhou Chauffeur, luckin coffee and other companies into the capital market. After Luckin's financial fraud, capital quickly separated from Lu Zhengyao's team without hesitation.

On February 4, Luckin filed with the U.S. Securities and Exchange Commission (SEC) that U.S. courts had agreed to pay Luckin a $180 million fine to the SEC for financial fraud. Coupled with the 61 million yuan that has been fined in China and the $187.5 million (about 1.19 billion yuan) settlement fee with the US class plaintiffs, Luckin has made the historical problem of financial fraud a thing of the past at a huge cost of 2.4 billion yuan, and Luckin can now lighten up and plan the future.

It is worth noting that the above is only the price of making mistakes, and Luckin must continue to pay for past operations. According to the data, in 2020, 2019 and 2018, the net loss of Luckin Coffee was 5.603 billion yuan, 3.161 billion yuan and 1.619 billion yuan respectively, and the cumulative loss in three years exceeded 10 billion yuan.

But in general, long pain is not as good as short pain, only when the hero breaks his wrist, pays the price, and completely cuts with the past, Luckin will have a new future. From this point of view, the change in Luckin is gratifying!

Is it possible to re-market?

Luckin's financial fraud incident has inspired us a lot, especially when China is preparing to promote the registration system in the whole market, and the treatment of Luckin by the US market allows us to get a close glimpse of the operating logic of the US capital market.

The U.S. market belongs to the typical open access market, the door of the market is always open, the IPO belongs to the registration system, there is no hard constraint, the exit mechanism is also relatively open, in addition to statutory compulsion, the exit mechanism is more dependent on market consciousness.

Judging from the logic and procedures of the US market for the handling of luckin coffee's financial fraud incident, the first is the civil dispute of the class action lawsuit caused by financial fraud, followed by the administrative punishment procedure of the SEC and even the criminal punishment procedure of the FBI, etc. The civil is the foundation, and the administrative and criminal are the protection.

Luckin's financial fraud stems from the disorderly expansion of capital, the use of huge subsidies to open up the market, harvest traffic, and carry out so-called platform and digital operations. This has always been the general way of playing domestic Internet platforms, Ali, Pinduoduo, Meituan, Didi, etc., all started from huge subsidies to precipitate traffic.

This logic is particularly true on new tracks in recent years. However, whether it is the coffee market or the tea market, it is reflected that it is difficult to change people's consumer psychology through capital subsidies and explosive products. In the coffee market, the trend of Luckin, Lian Coffee, Manner, etc. reveals that this market belongs to the slow heat industry.

Hey tea, tea color, etc. rely on the playing style of explosive products to transform the tea market, so that the tea market has changed from a slow market to a "fast food market", which also lacks sustainability. This can be seen from the rumors of layoffs and the news of the closure of the tea-colored shop.

It is undeniable that luckin coffee's marketing strategy is undoubtedly a subversive breakthrough, while other brands are through the taste and quality of the coffee itself, to cater to the Chinese market, Luckin through the innovative use of APP instead of products to cultivate users' consumption habits, and form a complete and mature business model.

According to the data of the Times fun insight engine, among the users who pay attention to the Luckin brand, the post-95s occupy half of the country, the post-90s account for a quarter, and the post-00s crowd follows close behind. From the perspective of user groups, this part of the group and the new consumer brand user group are basically the same, at the same time, this part of the population also has a relatively high sensitivity in terms of consumption capacity, and is the main force of coffee consumption.

Throughout 2021, Luckin launched more than 70 new products in many categories, including coffee, light milk tea, and fruit tea. Luckin has to do dozens of product research and development every once in a while, and decides the final product through the internal horse racing mechanism.

In 2022, Luckin launched a new product "Hua Kui Series", which includes five products such as Dirty, Raw Coconut Dirty, American, Latte, and Oribai. While the sales volume is growing steadily, it also takes advantage of the opportunity of hot new products to define the price in a new way, and it is "logical" to increase the average price of the product again and again.

Overall, after 1 and a half years of efforts since Luckin's delisting, Luckin's various reform measures have shown initial results, and the operation strategy has been positive and effective.

The latest news is that people familiar with the matter revealed that Luckin Coffee is meeting closely with investors to plot to re-list in the United States. According to the data, Luckin Coffee's stock is traded over the counter every day, and the overall valuation has exceeded $3 billion. It is reported that at present, many domestic hedge funds and capital have entered Luckin and are ready to welcome the next wave of feast.

This time, will Luckin succeed? See!

Resources:

"Ruixing walked out of the "game of life and death" and reshaped his image with Gu Ailing? Source: Sina Technology

"Can Luckin Who Accepts Punishment Be Reborn" Source: CBN

"Lu Zhengyao's team completely withdrew, and Luckin Coffee finally reached the clouds to see the sun?" Source: Anti-Short Research Center

"Driving away Lu Zhengyao, Oshi Nakaya Ailing, Ruixing Equity Dark War ushered in the finale? Source: Snow Leopard Finance and Economics