Produced by | At the forefront of entrepreneurship
Author | Ruth
Edit | Fang Fang
American Editor | Li Yufei
Audit | Ode
The founder Lu Zhengyao was exposed to new information about being executed, and the news of Cudi's suspected withdrawal from the Dehua market came one after another.
The official account "Dehua Shiren" mentioned in its latest tweet, "In Jinlong Central City, I saw that the Cudi Coffee store that opened in April last year has been closed, and the store signage has been removed. The Cudi Coffee store in the student canteen of Quanzhou Vocational College of Arts and Crafts is also closed. At this point, Dehua no longer has a Cudi coffee store in operation.
Regarding store closures, data from Jihai Brand Monitoring in February shows that in the past 90 days, Cudi Coffee has opened 476 new stores, but closed 826 stores. At that time, Cudi's official statement was that "the data of 826 stores is mainly due to the temporary closure of university stores during the winter vacation, and they will be open normally after the start of school." ”
However, judging from the current situation that the school in Dehua is still closed during the opening of the school year, the official statement of "temporarily closed due to winter vacation" is somewhat debatable.
When the coffee store failed to escape the fate of closing stores one after another, there were more and more complaints on social platforms about the "unstable cup" and "unpleasant" of the new brand tea cat.
(Photo / Little Red Book)
Cudi, who has made matters worse, is once again clouded with uncertainty about the future.
1. High-tech milk tea, but "leek flavor"?
Although Cudi has high hopes for the new brand of Tea Cat, judging from the feedback from consumers and affiliates at this stage, it does not seem to have brought the expected surprises.
The newly opened tea cat continued the previous low-price strategy of Cudi, and the great efforts of opening activities such as "buy one get one free" and "9.9 yuan for the whole site" have indeed attracted many consumers to try it.
Unfortunately, people were not impressed by the low price. On social platforms such as Xiaohongshu, there are negative comments from netizens such as "I can't buy it, I can't talk about it", "I really can't drink it", and so on.
(Photo / Little Red Book)
It is difficult to conquer consumers in terms of taste, which is naturally not a good thing for tea cats who are "late" in the crowded milk tea track.
The temptation of 9.9 yuan for two cups during the opening period is great, but in order to ensure profitability, the price will inevitably rise in the future. According to the price of the product before the line is drawn displayed in the tea cat applet, it is still in the mid-end price band of about 15 yuan.
(Photo / Tea Cat Mini Program)
Even if Tea Cat will continue Cudi's normal low-price strategy, the mid-to-low-end price band has already been crowded with many strong competitors such as Mixue Bingcheng, Shanghai Auntie, and Gu Ming. In other words, it is difficult to retain consumers simply by relying on uncompetitive low prices.
Not only are consumers dissatisfied with the taste, but some affiliates who are interested in joining the tea cat also call it "a big disappointment".
After investigation, a potential associate from Guizhou found that Tea Cat had many problems such as "not saving labor", "unstable meals", and "slow material replenishment during peak periods", which made him "very disappointed" when he was originally going to open a tea cat in Zunyi.
(Photo / Little Red Book)
It should be emphasized that although Tea Cat is positioned as affordable milk tea, its investment cost is not low.
According to the Tea Cat Investment Manual, if you buy human-machine collaboration equipment, you need to invest about 300,000 yuan to open a tea cat standard store, and 450,000 yuan to open a brand store, and if you want to lease human-machine collaboration equipment, you need to invest about 200,000 yuan to open a tea cat standard store, and about 350,000 yuan to open a brand store.
This means that Tea Cat must show some profit potential in order to attract interested affiliates.
However, according to the aforementioned netizens, "the first batch of tea cat affiliates have lost rent for several months, and the brand has not responded to the compensation plan." "If true, this information will undoubtedly increase the anxiety of existing associates and the hesitation of potential associates.
Although there are not many stores of Tea Cat, the controversy it has caused is also aggravating the "leek flavor" of this cup of "high-tech milk tea".
2. Multiple shackles are difficult to resolve, how far can Cudi go?
Whether it is forcing affiliates to sell alcohol at the end of last year or persuading affiliates to join Chamao this year, it is not difficult to see that Cudi, which has reached 6,000 stores, is eager for cash flow. However, the current situation that the sale of liquor was collectively exposed by the associates, and the tea cat also saw that it was difficult to support the situation, and it was doomed that the brand would most likely be difficult to continue to have a blood bar as desired.
Even if Cudi puts its hopes on the existing coffee business, it is difficult to alleviate the problems of regular shortages caused by the lack of maturity of the supply chain, the decline in consumer reputation caused by insufficient product research and development, and the large turnover of personnel caused by internal management chaos.
This can be seen from the dissatisfaction caused by the new collaboration with SpongeBob SquarePants again.
Similar to last year's "The Legend of Zhen Huan" and "Spy Playing Home", Cudi's co-branded SpongeBob SquarePants is a popular IP. As a result, even if some consumers are not old customers of Cudi, they are still willing to buy two cups for their favorite IP, in order to get the peripherals.
But it backfired. Some people bought 4 cups of co-branded drinks, thinking that they would get two Patrick cups and two SpongeBob SquarePants cups as officially advertised, but they got 4 Patricks and were told that there were no SpongeBob SquarePants cups in Kunming;
(Photo / Little Red Book)
During the high-density co-branding period at the end of last year, Cudi was frequently complained about the lack of stock and the unpleasant taste of the co-branded products, and now it seems that its supply chain and R&D problems have not been alleviated.
At the internal management level, after being boycotted by the affiliates due to forced alcohol sales and forced automatic ordering last year, there have been negative storms such as employees complaining about the unreasonable allocation of working hours and store managers complaining that they were threatened to be fired. It can be seen that Cudi still does not put internal management at an important level. In the long run, it will inevitably lead to dissatisfaction from the associates to the store staff, which will then affect the brand reputation.
(Photo / Little Red Book)
But the market won't give Cudi much time. Since the founder Lu Zhengyao was once again exposed to the information of the executor, the outside world has been full of speculation that this new coffee force "has tight cash flow and the brand is running out of time".
According to the Daily Economic News, some people in the catering industry said last year that Cudi owed a lot of money in the supply chain, and "there are a lot of accounts that have not been settled before the Spring Festival."
China Merchants Securities analysts Ding Zhechuan and Li Xiumin also pointed out that Cudi's main income in the first half of 2023 cannot cover the main expenses. In the first half of the year, the total expenditure including marketing expenses, subsidy expenditures, and live broadcast coupon sales on the Douyin platform exceeded 650 million yuan, but the one-time cash flow of new stores, the mark-up profits of raw material supply chains, and the gross profit sharing of stores totaled only about 500 million yuan.
To some extent, this shows that speculation about Cudi's tight cash flow is not entirely groundless.
At present, if Cudi can't make up for its shortcomings as soon as possible and regain its lost reputation and market, once it encounters a cash flow crisis, it will most likely be unable to avoid the fate of becoming the second "hero of the tongue".
*Note: The title image in the article is from the photo network and is based on the VRF protocol.