Luckin coffee's counterattack

For Luckin Coffee, this is a complete counterattack, and a more vivid metaphor is to die. It is absolutely impossible for a company to make a profit in the case of continuous bad luck, but Luckin Coffee did it. This not only shows the correctness of Luckin Coffee's own business model and operation style, but also shows us Luckin Coffee's own resilience.

A few days ago, I read an article that analyzed the current situation of the coffee market. The article points out that even in today's coffee market, there are still great opportunities. Although the article always tries to bypass the obstacle of Luckin Coffee, in the end, it is found that it is always unavoidable. When it comes to coffee, we must talk about Ruixing.

The author summarizes this phenomenon as follows: the volume of Luckin Coffee has reached a point where people can hardly ignore it. Even the opening speed of Starbucks can be regarded as a "static" existence in front of Luckin Coffee. As the saying goes, the martial arts in the world are only fast and unbreakable. If you must make a footnote for Luckin Coffee's yesterday, today and the coming tomorrow, it may be more appropriate to hurry.

With rapid brand expansion, rapid financing progress and rapid product iterative update, Luckin Coffee explains the most essential way to win in business-fast. It is precisely because Luckin Coffee has been playing fast for a long time that it can completely leave its competitors behind. After quickly establishing the scale advantage, the so-called profit may be a matter of time.

Then, what prompted Luckin Coffee to get rid of the crisis of financial fraud, and how to achieve a counterattack in the case of unsatisfactory performance in the capital market?

The potential of the coffee market itself has created all this.

What needs to be clear is that no matter whether Luckin Coffee is an Internet model or a traditional model, we can never ignore that Luckin Coffee is a coffee machine. Therefore, if the coffee market itself does not have much demand and potential, it is impossible for Luckin Coffee to sing all the way, then fall into the bottom of financial fraud, and then make a profit and complete the counterattack. Therefore, if we want to analyze the reasons for Luckin Coffee's counterattack, the first thing we need to think about is the potential of the coffee market itself.

According to the development trend of global coffee industry released by the US Department of Agriculture (USDA) at the end of June 2020, China's coffee production in 20 19/2020 is 190,000 bales, about114,000 tons, down 5% year-on-year; In 2020/202 1 coffee year, China's coffee production was 2,000 kilobales, up 5.3% year-on-year, reaching120,000 tons. 20 19/2020 China's coffee consumption is195,000 tons (per capita 15 cups/year), with a year-on-year increase of 4.8%.

In addition to the increasing coffee production, we can see that the consumption of coffee in China market is also increasing. When people's demand for coffee is increasing, Luckin Coffee, which wins by the number of stores, can naturally get a piece of the action. In addition, Luckin Coffee has certain uniqueness in the location of its own stores, especially the seamless connection with real coffee consumers, so it can enjoy the growing development dividend of the coffee market to the maximum extent.

Therefore, if we analyze the internal reasons of Luckin Coffee's profit, the expanding scale of China's coffee market and the increasing demand are the fundamental reasons for all this. In a word, coffee makes Luckin coffee. There is no coffee, only Rui Xing.

Changes in consumption patterns have made all this possible.

Although the outside world has been criticizing Luckin Coffee's playing style, and even defining Luckin Coffee as an Internet enterprise rather than a coffee enterprise, we have to admit that Luckin Coffee has really grasped the changes in users' consumption habits and behavior habits. Therefore, when we re-examine the deep-seated reasons for Luckin Coffee's profit, it is the key to ensure all this by facing up to the positive impact brought by the change of consumption pattern.

More and more coffee players began to regard online ordering as a direct way to consumers, and began to let more coffee users enjoy related products and services through the Internet. For Luckin Coffee, which has deeply bound the Internet and coffee since its birth, it can be said that it is ahead. Therefore, when the old players represented by Starbucks later joined the Internet camp, Luckin Coffee had already taken the lead.

In addition to meeting the needs of users as much as possible through the Internet, we also saw the relevant layout of new retail in Luckin Coffee. Through the deep integration of online and offline, Luckin Coffee once again stood at the forefront of industry development.

Through in-depth analysis of a series of strategic adjustments of Luckin Coffee, we will find that the key to ensure its sustainable development lies in Luckin Coffee taking the lead in grasping the changes of users' consumption patterns and thinking about ways to meet the changes of users' needs. Constantly transforming the coffee industry in the latest way, finding more points of convergence between the coffee industry and users' needs, so that users' needs can be met in the first time, is another reason for Luckin Coffee to achieve counterattack.

Continuous iteration of coffee-centered products

What needs to be clear is that the coffee industry itself has a huge market, not only because of the coffee product itself, but also because of the core product of coffee, which constantly expands more extensions and satisfies more users' needs. Therefore, the speed of product update iteration can let us see how many users can be obtained and how many user needs can be realized.

This seems to open the door to a new world of coffee market for us, that is, focusing on product research and development, really developing products that users really like, releasing the potential of products on the basis of the scale advantage of stores, and realizing the geometric growth of the company's development. On the other hand, if we only focus on the rapid expansion of the number of stores without thinking about product iteration, innovation and research and development, then the so-called stores may really be just a number and have no other significance.

Especially under the background that the scale benefit development model is widely criticized, we need to return to the product itself, release the potential of the expanded store through continuous research and development of the product and continuous innovation of the product, and make the coffee business bigger and bigger, so as to offset the pressure brought by the unlimited expansion of scale and achieve income balance.

Luckin Coffee once again proves to us with practical actions that the coffee market needs a dual-engine model of "product+store". The "store" constantly collects the needs of the largest number of users, while the "product" is to realize the needs of the largest number of users. After the product is realized, it will be infinitely enlarged through the "store", thus expanding its own development. The cycle mode from "store" to "product" and from "product" to "store" tells us that the core lies in the iterative update of "product", and only by focusing on the product itself can we achieve new development.

The power of science and technology created all this.

Although many people don't want to talk about it, we can't get rid of the relationship between Luckin Coffee and the Internet. So many people define Luckin Coffee as an Internet company, not a coffee company. It is precisely because of the mode and play of the Internet that Luckin Coffee has achieved its own rapid development in a very short time, so that it can compete with the coffee giant Starbucks.

It is obviously wrong to define Luckin Coffee as an Internet company. I prefer to define Luckin Coffee as an iterative company. From the early "internet plus" model, to the later new retail model, and now to the digital model, Luckin Coffee is constantly upgrading its technology.

Therefore, in order to find out the reason of Luckin Coffee's counterattack, the scientific and technological strength revealed in its development process is the key to ensure that all this can be realized. Ruixing caffeine technology was born, changed by science and technology, and realized the counterattack of science and technology.

The author believes that the large-scale model represented by opening a store can only work in the early stage of enterprise development. When the market structure of the coffee industry is determined, especially when the scale advantage is no longer available, it will inevitably face more and more problems to promote its own development by means of scale expansion. At this time, we need to find a new development model outside the scale advantage, and the role of science and technology is highlighted at this moment.

Under the background of the digital wave, we have every reason to believe that the next decisive battle in the coffee market must be digitalization, and for Luckin Coffee, which has already achieved its own growth by digitalization, it has to be said that it is once again at the forefront of industry development.

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When the news that Luckin Coffee achieved profitability was revealed, the eyes of the outside world once again focused on this. For Luckin Coffee, it is really not easy to achieve this goal. However, if we deeply analyze the reasons, Luckin Coffee seems to make a profit. With the big market of coffee, the large base of users, the continuous innovation of products and the help of technology, the counterattack of Luckin Coffee seems to be no longer out of reach.

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Author: Meng Yonghui, senior writer, columnist, special commentator, industry research expert and strategic consultant. Long-term focus on industry research, published more than 4 million words of financial and scientific articles. Support the author's source sharing, please keep the author's copyright information when reprinting, and offenders will be prosecuted.