Source: Blueberry Finance
The first "slap in the face" drama in 2024 comes from Cudi, a new force in freshly made coffee, and its affiliates.
A few days ago, Cudi announced two new regulations at the joint venture work conference: one is that the system will automatically order/return orders in stores in the future, and the other is that the headquarters requires stores to sell two health wines under Moutai.
The deprivation of ordering autonomy and the "forcible" sale of clearly unsellable alcohol categories have sparked mass dissatisfaction among affiliates, many of whom have posted complaints about Cudi on social media platforms such as Xiaohongshu and Douyin.
Interestingly, within two days, Cudi "changed his tune" and quickly adjusted the rules for auto-ordering and selling alcohol.
It is not difficult to find that the continuous decline in sales has exhausted the patience of the associates, and they are no longer willing to cooperate with the so-called "new tricks" of the headquarters without complaints.
At present, Cudi, who still needs the development confidence of its associates, is in a hurry to get out of the existential crisis, and I am afraid that it will not dare to be radical easily.
1. Behind the "thousand-layer routine", cash flow has become the biggest shackle
The number of daily cups has dropped sharply, and joint venture activities are frequently dumb...... After more than a year of "ineffective development", the associates who chose to follow Boss Lu unconditionally in the past not only no longer cooperated, but even began to take the initiative to tear apart the routine of the headquarters.
Whether it is the human-machine collaboration and cross-border tea cat making some time ago, or the recent automatic ordering and selling of alcohol, in the eyes of the associates, it is the routine set by Cudi under the banner of "headquarters is good for you".
As soon as the news of human-robot collaboration came out, some knowledgeable affiliates noticed the irrationality in the internal group, including the high cost of the robot itself and the uncertainty of adapting to the new model. Some people even bluntly said that "the project is specially born for leeks".
It is even more difficult for them to have confidence in selling tea across borders. Regardless of the fact that the current competition in the new tea drink market has long been white-hot, it is more than a little difficult for tea cats, who only have price advantages, to break through when the head brands generally begin to "sink".
It is precisely because they are clear about the "routine" of the headquarters that when the regulations on automatic ordering and selling alcohol came out, they not only stopped following them, but also "collectively unveiled the rod" and protested in the official group, internal group, and social platform.
The emergence of the automatic ordering mechanism will greatly affect the store's control of profits, making the associates who have no time to return their costs more and more passive.
The sale of the so-called health liquor under Moutai is full of hidden dangers: it affects the original coffee brand positioning of the store, and the "strength" of selling it to the headquarters to make a wedding dress to "obtain the Feitian Moutai index" and so on.
In fact, as long as you look back at the development process of Cudi, it is not difficult to find the "same lineage" of its routine.
In the early days, the brand attracted associates with the label of "former Luckin Finance founding team", and when the associates paid for the operation, they found that Cudi had failed to meet the level of Luckin in terms of product, marketing and supply chain. Otherwise, there would not be today's sales dilemma.
And the reason why there are constant money trapping routines is that Cudi has been slow to find a solution to the cash flow problem.
In the middle of last year, industry insiders broke the news that Cudi was using acceptance bills to settle with associates, and the continued sluggish sales volume led to an increase in the number of stores that closed down and exited the market since the off-season, and the cash flow situation on Cudi's account was probably not optimistic. In this way, there is a series of new actions that desire to save themselves.
But it is clear that the affiliates are no longer willing to "do it obediently".
2. Calm associates, hard to calm Cudi
The reason why the affiliates have gone from the enthusiasm of the early days to the relatively calm state today is essentially the problems exposed by Cudi in the development process, which has caused their enthusiasm to be consumed step by step.
The early price war did help Cudi gain popularity and achieve rapid store expansion, but even with the support of subsidies provided by the headquarters, many stores still struggled on the edge of the profit and loss line for a long time. In order to recoup their capital as soon as possible, they had to accept the "multi-store reward" from the headquarters, and opened two or more stores from one store.
But what they didn't expect was that Cudi's subsequent development would be so weak.
At the product level, it was forgivable to ignore product research and development during the early price war, but with the increase in the number of stores and the increase in brand influence, Cudi is still reluctant to spend more time on products. Either it is a copy of Luckin's existing products, or it is a new product that is not much different from the existing product, resulting in its failure to launch a popular product out of the circle so far.
You must know that almost all of the existing leading chain coffee and tea brands have popular products: Heytea's succulent grapes, Nai Xue's tea's domineering cheese strawberry, and Luckin's raw coconut latte......
Moreover, in the context of the increasing involution of the coffee market, Cudi's low-price "trump card" is not only facing the impact of rivals such as Lucky Coffee, but also difficult to gain the upper hand in the tug-of-war with Luckin, which has already made a profit. At this time, if the product power is not followed up in time, those consumers who come to the lower price are very likely to quickly switch to others when the brand with a lower price appears.
The lack of product strength also directly affected a series of subsequent joint activities. In the joint activities with IPs such as "The Legend of Zhen Huan" and "Spy Playing Home", as well as stars such as Fan Chengcheng and Wang Yibo, many consumers complained that the products were unpleasant, which affected the co-branded IP.
There are also "cliché" supply chain problems, which lead to the regular shortage of some products in stores and co-branded peripherals, which not only affects the daily operations of the associates, but also makes the brand's impression in the minds of consumers gradually decline.
Earlier, an associate had written to the headquarters, saying that the partners in their stores would be complained or even abused by consumers from time to time because of the shortage of products or surrounding products. To some extent, they have to bear not only the economic consequences of poor sales caused by the supply chain, but also the emotional consequences of consumer dissatisfaction.
The more calm an affiliate is, the harder it is for Cudi, who has multiple issues at the product, marketing, and supply chain levels, to calm down. Otherwise, they would not have frequently co-branded in the near future, and even sold drinks that are not related to the main business. These problems all point to the fact that it is difficult for the brand to increase sales in the short term, and the external financing is hopeless again due to the new execution information of Boss Lu, and the brand is worrying about the future.
The undeniable reality is that whether Cudi wants to maintain the scale of its existing stores or start a new round of competition in the tea market as planned, it is inseparable from the support of its affiliates.
In particular, Cudi's proud crazy store opening has long become the consensus of tea brands at this stage. According to the statistics of "Yilan Commerce", the number of Mixue Bingcheng stores has approached 30,000, followed by brands such as Gu Ming, Tea Baidao, and Shanghai Auntie, and are moving towards the scale of 10,000 stores. It is almost impossible for the tea cat to quickly catch up in scale in a short period of time.
As the relationship with the affiliates becomes more and more "delicate", this new coffee force with "backyard fire" is bringing itself to the embarrassing situation of "radical and difficult to implement, and Buddhism difficult to survive".