Preface
"With American money, invite Chinese to coffee!" This phrase once circulated wildly on the Internet.
But what everyone doesn't know is that Lu Zhengyao, the founder of Luckin, was found to have falsified financial statements, which put him in a deep quagmire.
After that, Lu Zhengyao and Qian Zhiya joined hands to create the Cudi coffee brand, which was successfully carried out in the national chain, thinking that he would be able to set sail again and be ready to go, but on April 7 this year, there was news that Lu Zhengyao was forced to pay 1.89 billion.
In the face of this astronomical figure of nearly 2 billion, how should Lu Zhengyao face it?
Enforcement
As the founder of Cudi Coffee, Lu Zhengyao was forced to execute 1.89 billion on April 7, 2024, which swept the Internet.
As a businessman who is well-known in the business world, Lu Zhengyao's titles in the capital market are really varied.
The various preferential actions he made when he founded Luckin made Luckin become sought-after for a while, and all kinds of coffee coupons made everyone get soft, and Luckin chain coffee shops soon spread all over the country.
Car Rental is also a proud work of Lu Zhengyao, and the title of "the world's first private car" is given to him, because he is good at business operations, and has carried out several successful entrepreneurial models in a row, Lu Zhengyao is also named a business wizard.
In 2022, Cudi Coffee launched strongly, and after only one year of opening, Cudi Coffee has more than 6,000 stores worldwide, ranking fourth in the world.
On February 26, 2024, there will be as many as 7,000 stores in the world, and it will launch an unlimited promotion of nine pieces and nine for three months.
In the official information, on April 7, the information released by Tianyan showed that Lu Zhengyao and his partner Li Huan were listed as executors by the court, and the amount of execution was as high as 1.89 billion, although the specific reason has not been revealed, but in January this year, Lu Zhengyao was forced to pay more than 7.81 million yuan.
In the recent Tianyan also showed that Lu Zhengyao also added a new law restricting consumption, this is because he did not fulfill the legal documents according to the regulations, this ruling involves a domestic case, and it is precisely because of this that he was forced to pay more than 7 million yuan.
You must know that in 2021, Lu Zhengyao also faced more than 1.2 billion yuan in enforcement.
I thought this was terrifying enough, but before that, as early as 2020, Luckin was exposed to fake financial statements, with an amount of up to 2.2 billion.
This not only put Luckin in a crisis, but even the Shenzhou system has suffered a huge blow, and the Shenzhou Car Rental that Lu Zhengyao worked so hard to establish is also facing delisting.
In this case, Lu Zhengyao came forward to apologize, and Luckin also announced that he was no longer the chairman of Luckin Group.
Treat yourself with American money
At the beginning, when Luckin Coffee was launched strongly with its own preferential activities, in addition to being respected by the majority of consumers, Luckin took the investment of many American investors to give a large number of coupons to China, and was also ridiculed by the majority of netizens as "the light of the nation", "take Americans' money to invite Chinese to coffee" and other words.
However, it was precisely because of Luckin's actions that something went wrong.
When Luckin was listed in the United States, China was not too well-known, and it was the first time that a coffee brand like Starbucks was seen in the United States.
Therefore, after seeing Luckin Coffee, the United States found that China is a huge consumer market, and if it can create the largest Chinese coffee brand, the profits behind it can be soft.
Therefore, the potential of Luckin Coffee has been seen, and Luckin has successfully won the favor of a large number of consumers who like coffee by virtue of its preferential prices and coupons sent out like running water, so many American investors are also attracted by Luckin Coffee and have invested in Luckin.
I thought this was a very good investment direction, but I didn't expect Luckin Coffee to give investors a big job, he took investors' funds to invite everyone to drink coffee, kept issuing coupons, and then forged the amount of business data as high as 2.2 billion.
Not to mention the sharp drop in Luckin's stock, offline stores have also been hit, employees in the store are facing the crisis of losing their jobs, the stores are also facing losses, and the suppliers who provide raw materials for Luckin are also in danger.
The most important thing is that Luckin's operation has lost its reputation, and what he represents abroad is not himself, but also the credibility of Chinese enterprises.
A large number of issued coupons, coupled with continuous expansion, will naturally have financial problems, Luckin in this way, not only itself has been impacted, many companies that want to impact foreign markets, will also be subject to fluctuations.
Go down in flames
It seems that Lu Zhengyao has been smooth sailing on the road to entrepreneurship, but looking back carefully, Luckin's crazy expansion is a rapid expansion with the power of capital, but because of the rapid expansion, these industries have become a bubble of nothingness, which cannot last long, and finally exploded apart.
In the first year after the establishment of Luckin, there were as many as 2,000 chain stores in the country, and in the second year, the number of stores also skyrocketed, from more than 2,000 to 4,910, nearly 500 stores.
This development speed is faster than Starbucks, and when you check the number, Luckin has 600 more stores than Starbucks.
A large number of expansions, coupled with Luckin's non-stop price reduction activities, caused Luckin to lose 800 million yuan in nine months.
In 2019, Luckin was listed in the United States, and after 2020, the wealth of Lu Zhengyao's family reached an unimaginable 26.13 billion.
However, in 2020, Luckin falsified 2.2 billion financial statements and caused his market value to plummet by 80% overnight.
Cudi Coffee also took the old path of Luckin Coffee, with the highest number of stores opened in a month directly exceeding 1,500, due to the excessively fast opening model, Cudi Coffee also because of the rapid joint operation model, resulting in a crisis in the safety of its cash flow.
In February this year, Cudi Coffee has been exposed to a cash crunch, and it was revealed that in terms of the supply chain, there are a lot of arrears, and Cudi has not yet obtained financing, mainly relying on the purchase of raw materials from the associated stores plus the commission and margin from the gross profit of the associate to obtain funds.
From the falsification of financial reports to the enforcement of 1.89 billion now, Lu Zhengyao can be said to have failed ruthlessly.
epilogue
The most important thing to do business is integrity, and it is not wise to do business just by relying on discounts, fame, and low prices.
Lu Zhengyao lost not only money, but also his reputation in business!