COSTA closed the store, Starbucks lost money, but Luckin Coffee lived well.

Editor | Rao Feixia

Traditional coffee brands are facing great challenges.

A few days ago, according to media reports, the British coffee chain COSTA closed many stores in Beijing, Hangzhou, Qingdao and Nanjing. Qingdao and Beijing alone have closed more than 40 stores, accounting for 65,438+00% of their stores in China.

Not only is COSTA welcoming the tide of closing stores, but Starbucks, the boss of the coffee industry, has a hard time in the first half of this year. After a large number of store closures were announced in June, a "worst" quarterly financial report was handed over on July 29. The financial report shows that in the third quarter of fiscal year 2020 (from March 30 to June 28), Starbucks' same-store sales decreased by 40%, while its revenue and net profit also fell sharply.

In fact, the situation of Starbucks is not optimistic. In recent years, with the intensification of competition in the coffee market, there are not a few emerging coffee brands in trouble, the most typical of which is the Internet coffee brand Lian Coffee, which was established earlier than Luckin Coffee. On September 8th, Lian Coffee said on WeChat WeChat official account that all its offline stores have been closed, and there is no plan to reopen for the time being. Instead, it is an e-commerce channel. Just five days ago, Lian Coffee just announced a new round of financing and made a high-profile return.

Liancoffee was founded on 20 14 and was once the darling of capital. According to Tianyancha's information, Liancoffee has obtained 8 rounds of financing. Even in 20 17, it became the first profitable coffee chain brand after Starbucks. Unfortunately, with the increasingly fierce market competition, even coffee has gradually lost its battlefield since 2020.

But interestingly, under the situation that major coffee brands have closed their stores or lost money, Ruixing, who was once worried by the market that it would "close down", is still alive and well. On August 10, Rui Xing returned to the public view after being silent for half a year. According to a number of media reports, the management of Ruixun said that at present, Ruixun "has achieved a positive cash flow of a single store and an overall break-even point, and it is expected to achieve an overall profit in 20021year".

On May 9, 20 19, Ruixun, who was only 1 year and 8 months old, went public in the United States, setting a record for the shortest time to go public. However, less than a year after listing, this former capital darling was forced to withdraw from the market because of explosive financial fraud. After that, more voices about Ruixing were "When Ruixing went bankrupt" and "When Ruixing completely disappeared from the market".

Mao Zuodong, a writer and a senior researcher in the coffee field, once held the position of operation and cross-border cooperation of Jingdiao Time Cafe. He told Burning Finance that Ruixing's problem has always been not the bottom operation, but the upper structure. Financial fraud is also the top management, and the middle and bottom management is still good, which is the key to show profits after Ruixing has dealt with the upper structure.

It is also reported that at present, Ruixun's national store resumption rate is close to 90%, and Ruixun's previous promise that "more than 4,000 stores are open normally" has also become a reality.

This series of signs shows that Ruixing's offline operation does not seem to be affected by the delisting storm.

One of the representatives of traditional coffee brands, Starbucks' old rival, the old British coffee chain COSTA, finally failed after several years of struggle.

In August, 2020, COSTA, an old British coffee brand, which had been operating in China for many years, fell into a large-scale bankruptcy tide. According to media reports, COSTA has closed many stores in Beijing, Hangzhou, Qingdao and Nanjing. Among them, Qingdao, which is particularly serious, closed all stores; Followed by Beijing, there are nearly 20 closed stores, and the number of closed stores exceeds 10% of the total number of stores in China market.

In China market, COSTA once boasted that "2,500 stores were opened in 2065,438+08". Although this goal was later changed to "open 900 stores in 2020", not only did the lowered goal of opening stores not be realized, but the remaining 300 stores also fell into the "closing tide".

In order to reduce the operating pressure, COSTA has been trying to change in recent years. Just two years ago, COSTA was acquired by Coca-Cola, a retail giant, with a huge sum of $5 1 billion, and with the help of capital, it launched ready-to-drink coffee products in early 2020, hoping to expand the market. In June this year, COSTA also cooperated with Jiuyang to launch a joint capsule coffee machine to enter the home coffee market. But from the current point of view, Costa's series of actions have not improved his difficult situation.

According to public data, COSTA has only about 400 stores in China market at present, which is far from the goal of entering China for the first time. Starbucks has more than 4,000 stores in China. This old British coffee chain, which is trying to compete with Starbucks, now has only about one-tenth as many stores in China.

Zhang Hong, the founder of Squire Coffee Studio, said in an interview with Burning Finance that COSTA had a relatively high positioning when it first entered the China market, but it gradually evolved into a business circle supporting model. Coupled with the impact of the epidemic, the momentum has been stagnant, and Costa's current focus is actually to maintain stability, not blind expansion.

In fact, not only COSTA, but also Starbucks, the world's largest coffee chain brand, which COSTA has always regarded as a competitor, is not very comfortable.

On July 29th, Starbucks released its financial report, also known as the "worst" financial report in Starbucks' history.

According to the financial report, due to the global epidemic, in the third fiscal quarter of this year (March 30 to June 28), Starbucks' global same-store sales fell by 40%; Total revenue reached $4.22 billion, but it was far less than $6.8 billion in the same period last year, down 38. 12% year-on-year. The net profit loss was $678 million, compared with $65.438+$37.3 million in the same period last year.

Affected by the epidemic, most Starbucks stores around the world are closed. According to the financial report data, in mid-April, Starbucks' same-store sales dropped by 65%. It recovered to the decline of 16% before June, but it is still in a sharp downward trend. Among them, the same-store sales in China decreased 19%.

Prior to this, in June, Starbucks announced plans to permanently close about 400 stores in the United States in the next 18 months. In the next two years, it will also restructure its business in Canada, including closing 200 stores.

"Starbucks' loss still surprised me." When analyzing Starbucks' financial report, Mao Shu said that traditional coffee brands like Starbucks and Costa sell not only coffee, but also derivatives and third-party space services. For these traditional brands, rent is the biggest expenditure, followed by manpower and loss, but in terms of rent, Starbucks has a large premium space, so the loss of Starbucks is hard to believe.

In Mao Shu's view, the traditional coffee brand represented by Starbucks is under great operating pressure. On the one hand, with the vigorous development of China's coffee market, major brands have entered the staking, which has squeezed the traditional coffee brand market. "But the main reason is that Starbucks is too traditional, and this tradition is mainly reflected in the thinking of management. Although these traditional brands are also exploring new models, they have failed to jump out of their own shackles. "

As Uncle Mao said, in recent years, the coffee market in China is entering a stage of rapid development. According to the Analysis Report on Market Demand and Investment Planning of China's Coffee Industry from 2020 to 2025 issued by Forward-looking Industry Research Institute, the average annual growth rate of China's coffee consumption has reached 15%, and by 2025, the size of China's coffee market will reach 2 1 7 1 100 million yuan.

Previously, Luckin Coffee's prospectus also showed that in 20 18, the per capita coffee consumption in China was 6.2 cups. Compared with developed countries, the per capita coffee consumption in China was still at a low level. In 20 18, the per capita coffee consumption in Chinese mainland was only 0.7 1% of that in Germany and 1.6% of that in the United States. In 20 19, the per capita coffee consumption in China was about 7.2 cups.

Under the temptation of the huge market, many coffee brands began to squeeze into the market. For example, after being exclusively invested by Tencent, Tim Hortons, a foreign traditional coffee brand and a Canadian chain coffee brand, said that more than 65,438+0,500 stores will be opened in China in the next few years; %Arabica, an online celebrity coffee from Japan, has also accelerated its layout, opening more than 20 stores in the China market.

In addition to traditional coffee brands, even domestic Internet coffee brands such as Coffee, Sandun Half and Yongpu have also risen rapidly in recent years. There are some cross-border entrants. Suntory, Nestle and other overseas brands have also been on the track for a long time; Nongfu Spring, Yili and Mengniu, which have just finished listing, are also entering the coffee field. Even Tong Ren Tang sells health coffee.

New types of teas such as Hi Tea, Naixue Tea and Cocoa are also exploring innovative coffee products.

However, in this red sea, there is a rule that cannot be ignored: China's coffee market has always had the saying "6 losses and 3 draws 1 profit", which seems to be applicable to any brand.

In Zhang Hong's view, emerging brands, especially Internet coffee, are more likely to attract consumers' criticisms than traditional coffee brands because of their eye-catching performance in marketing and operation after entering the China market. "After rising stars such as Internet coffee enter the market, they attract customers very quickly through low prices, activities and the Internet. Compared with the old brands, these new brands are more flexible and have brought them some impact. "

In stark contrast to Starbucks' difficult situation, Ruixing, who was forced to withdraw from the market because of financial fraud and was once questioned by the market as "closed down", had an opportunity after regrouping for half a year.

According to media reports, on August 8, Ruixing announced some operating conditions at the Mid-year National Conference: as of July, the cash flow of a single store has been positive; Excluding unopened stores, the overall profit and loss balance was achieved; The management predicts that the overall profit will be realized in 20021year according to the current operating conditions.

Is Rui Xing really alive? Recently, Combustion Finance conducted a field survey on Ruixing Store near Guo Mao, the most prosperous business district in Beijing.

Combustion Finance first visited the Ruixingmen Store located in the northeast corner of Building Jianwai SOHO 15 in Chaoyang District, Beijing. This two-story shop is the largest near Jianwai SOHO.

Although it is Monday afternoon, the first floor is basically full of guests, and 7-8 people are waiting in line to get coffee. According to financial statistics, there are about 13- 15 guests on the first floor.

There are relatively few guests on the second floor, only two tables and a cup that has not been cleaned up in time.

During the 40 minutes from 13: 40 to 14: 20, guests will come together every 3-5 minutes, including more female users, as well as guests and courier brothers who come to pick up takeout one after another.

Later, Ran Caijing came to this Ruixing store located in B2, Block D, World Trade Center, No.6 Jianguomenwai Street, Chaoyang District, Beijing. Compared with the previous store, the area of this store is much smaller, with only three tables. Although it is close to the International Trade Station of Beijing Subway 10 line and inside the shopping mall, the passenger flow seems to be not as big as last time. Only three tables are still full of six guests, and there are three people waiting at the front desk to pick up their meals.

The time to stay in this store is about 14:40- 15:30. During this period, there were not many customers in the store, and the clerk was busy replenishing goods.

While waiting for coffee, Rancai chatted with the clerk of Ruixing Store in B2, Tower D, World Trade Center, Central about the impact of financial fraud at the beginning of the year on the store. The clerk in this store said that there was still some influence when it happened, but it gradually subsided.

In addition to a steady stream of customers, Ruixing is also constantly introducing new products. According to statistics, since April 2020, Ruixing * * * has launched nearly 60 new products. On the day of the field trip to burn wealth, Ruixing just launched another new product "strong milk latte".

While tasting new products, Burning Wealth also inadvertently learned that, contrary to the previous deep pockets, Ruixing almost achieved the ultimate cost savings.

Because I forgot to notice that the ice was removed when I placed the order, I went to the front desk and dictated to the clerk. As a result, the reply was that you need to call Ruixing's customer service phone number, cancel the order and place an order again, and note the details. After asking Xia Ran Finance and Economics, I learned that because the air conditioning temperature in the commercial center is too low, many guests will verbally emphasize the need for deicing when placing an order because they forget the remarks. After the ice cubes are removed, milk needs to be added to the drink.

The clerk didn't care at first. This led to nearly 80 kilograms of milk that could not be explained to the company at the checkout every day. In order to avoid this phenomenon, they have to strictly control this phenomenon through orders, and they need to take pictures one by one every night and feed them back to the headquarters.

When asked about the number of orders for one day, the clerk of Ruixing Store located in B2, Block D of World Trade Center in Central said that at present, they can't see the details of orders here, and they are all counted by the company's backstage. However, the clerk said that overall, the order volume is still good.

However, the clerk also told Burning Finance that the impact of the epidemic was actually greater than the impact of financial fraud. Those who can survive now are those with better benefits in the past, and those with bad benefits are basically closed.

Under the double influence of financial fraud and epidemic situation, according to previous reports, nearly one-fifth of more than 400 stores in Ruixing Beijing will be closed this year. According to Ruixun employees, before the fake news was exposed, because many Ruixun stores in Beijing covered overlapping consumer groups, it was decided to close 70 stores in Beijing.

In this regard, Ruixing has publicly responded that due to the epidemic and other related factors, Ruixing is indeed carrying out normal store optimization, "shutting down and transferring" individual stores with poor benefits or overlapping customer coverage, while continuing to open new stores. This is also the direction of strategic adjustment of the company's stores. Earlier, according to media reports, at present, the number of stores operated normally by Ruixing is 5 197.

In view of Ruixing's current good operation, Mao Shu said that the acceleration of capital has made many people unable to see the operation of offline stores, such as the staff reserve, the taste, price, standardization of coffee, including word of mouth, whether it can continue to operate and so on. After Ruixing's high-level fraud incident, this part of the core was highlighted. "Ruixing has gradually changed from showstopper at the beginning to a slightly operated coffee brand."

Why can't even traditional coffee brands such as Starbucks and COSTA escape the fate of closing stores, layoffs and declining performance? Why can Ruixing, abandoned by capital, continue to live?

"Rui Xing is never short of money. After financing, even if the financial fraud scandal is exposed, the funds on its books are still abundant. " When Rancai indicated the source of funds for Ruixing's continued operation, Mike, co-founder of Swanna Coffee, said.

As McCaughey said, the last quarterly financial report before Ruixun's delisting showed that as of 2065438+September 30, 2009, there was 5.544 billion yuan in Ruixun's account.

In McCaughey's view, finance and operation are two different things. The essence of Ruixing's financial fraud is the high-level pursuit of capital. In order to raise the stock price, in the final analysis, it is harmful to the brand and has little to do with the business level. Whether there is fake action or not, Ruixing's development direction has always been correct. And its mode of low customer order, low gross profit and high flow has been running through the whole business.

For many people's doubts that "Ruixing is better than before", Mai Kou analyzed that Lu's punishment and the company's operation itself should be viewed separately. Now there is no blind pursuit of performance, so that Ruixing can focus more on business and store management. After a lot of optimization, the phenomenon is getting better and better.

Zhang Hong believes that Ruixing is relatively successful in cultivating users. Consumers have developed the habit of drinking coffee through previous subsidies and concessions. "This habit will not disappear because of Ruixing's financial fraud."

Xiao Xia, a serious coffee patient and a "loyal fan" of Ruixing, also told Burning Finance that when the epidemic was at its worst, the days without coffee made her feel anxious. "Compared with financial fraud, I am more concerned about whether Ruixing still has discount coupons and whether the taste of coffee will change." Xiao Xia's voice represents the views of most Ruixun consumers.

In this case, the epidemic actually made Ruixing, a brand that focuses on online coffee, get more traffic. According to the interview data of Insight Technology on Ruixing, as of July 2020, the number of private domain users of Luckin Coffee has exceeded 6.5438+0.8 million, and the number of WeChat communities has exceeded 9,000. Among these users, Luckin Coffee has a large proportion of "iron powder" and high brand loyalty.

Burning wealth joined the community by scanning the QR code placed in Ruixingmen Store, East Lake International Center, Chaoyang District, Beijing, and won the first 3.8% discount coupon, which is rare in the current App. In addition, every day, the group will issue various coupons from time to time, not only drinks, but also light food and desserts.

The data shows that this directly brought an average daily order sales of 35,000 cups to Ruixing. After ordinary customers became community users, the monthly consumption frequency increased by 30%, the weekly repurchase frequency increased by 28%, and the MAU increased by about 65,438+00%.

According to the official disclosure of Ruixing, the number of new users joining the group is still increasing at a rate of about 600,000 per month, and the number of APP users of Luckin Coffee exceeds 50 million. According to this speed, in September, Ruixing's community users exceeded 2 million, and direct orders could reach 50,000 cups.

Mao Shu believes that Ruixing has completed the process of "it looks for customers" in the early stage, and now it is "customers looking for it".

"Under the Internet thinking, the profit model is based on traffic profit thinking. In order to absorb traffic in the early stage, new brands and new projects must invest a lot of money. " Mao Shu said that judging whether a company can finally make a profit depends on whether the team genes have the ability to control the whole logic. Second, look at the terminal's operational capability and customer feedback. "In fact, after the financial fraud incident, Ruixun's terminal can still maintain normal and benign operation, indicating that Ruixun has indeed come back to life. However, whether it is short-term profit or long-term profit, it depends on Ruixing's ability to continue to operate and export. "

Maikou analysis, chain formats like Ruixing are generally divided into company level and store level. As far as the store level is concerned, it does not include the management expenses of the headquarters, the research and development expenses of the marketing expenditure system and so on. Therefore, it is relatively easy for a single store to achieve positive cash flow. "However, it will take some time to achieve overall profitability."

* The title map is from vision china. At the request of the interviewee, McCoy and Xiao Xia were assumed as aliases.