Cudi Associates went from rushing to speeding out

Visual China.

Text |Gong Jinhui.

A Beijing-based netizen posted on Xiaohongshu that several Cudi stores he frequented showed "the store is closed today". I thought it was a normal weekend break, but when I went to the store, I found that it was empty.

A person familiar with the matter in the comment area said that the Chaowai SOHOA store closed a few days ago, because the boss felt that the company upstairs of the store had moved away, and he was worried that business would decline more and more.

Some Cudi insiders revealed that the wave of store closures in February is expected to be relatively strong. This means that Cudi's series of "self-help" actions in the past few months have not only failed to achieve the desired effect, but have pressed the acceleration button on the departure of the affiliates.

The negative impact of the off-season has not yet been resolved, and if the number of associates continues to increase, Cudi's survival situation will become more and more difficult.

Since its inception, Cudi's most "mysterious" thing is its cash flow situation.

Debuting as the "Sponsor Partner of the Argentine National Football Team in China", it is difficult not to notice this new brand that has not yet opened its stores at that time. What's more, in June last year, Cudi also officially announced that it had signed a contract to become the global sponsor of the Argentine national football team, becoming the only Chinese brand among the global sponsors of the Argentine Football Association (AFA).

Obviously, there is no capital to support it, and the closure of stores that have just opened for half a year is far beyond that of its peers: according to the data of the "Blue Book of Chain Catering Brand Store Development Trends in the First Half of 2023", a total of 318 stores will be closed in the first half of 2023, which is about 2 of Lucky Coffee89 times, Starbucks 859 times. So, what exactly does Cudi rely on to pay for such a large advertising spend?

We don't know the details of the payment of advertising fees, but since Cudi was exposed in June last year to start using acceptance bills to settle with ** merchants, and the 200 million US dollars it will invest in 10 years to build a ** chain base, and it is in the form of joint ventures with major ** merchants, as early as then, Cudi's cash flow situation may not be very optimistic.

After entering the off-season, not only did the daily cup volume drop to about 150 cups, but the speed of store expansion also slowed down significantly. Statistics from Narrow Door Dining Eye show that in November last year, Cudi only added 200 new stores, down 76 percent from the previous month44%。

The dismal sales data for several days made the former king, who simply relied on low prices, finally realize the problem, and instead increased the frequency of co-branding, and invited traffic artists to endorse the brand.

During this period, Cudi has successively reached cooperation with popular IPs such as "Pink Bear", "The Legend of Zhen Huan", and "Spy Playing Home", and also invited Fan Chengcheng and Wang Yibo as spokespersons to accumulate popularity for the brand.

Unfortunately, judging from a series of negative feedbacks such as "new products are unpalatable", "co-branded perfunctory", and "poor popularity", Cudi did not achieve the expected marketing effect, but instead exposed the ** chain that has accumulated deep shortcomings to more attention.

*The chain reaction brought by the chain includes, but is not limited to: the new products that consumers want to drink are out of stock for a long time, and the associated partners have to receive both bad reviews and scolding due to the regular shortage of goods around the store.

Seeing that the co-branding did not work, Cudi turned to launch a number of activities that were "saucered" by the associates, such as human-machine collaboration, forced alcohol sales and automatic ordering.

Unexpectedly, due to the failure of the previous first-class war and high-density marketing to achieve practical results, the affiliates were not only calmer than before in the face of the new regulations, but also had a collective bombardment, forcing Cudi, who is still inseparable from the support of the affiliates at this stage, to revise the rules overnight.

However, judging from the fact that many stores still choose to close their stores as shown at the beginning, it is clear that this has not stopped the determination of the affiliates to leave.

Judging from the volume of 7,000 stores, the affiliate is confident to accompany Cudi to continue to dig in the coffee market, which has not yet fully developed into a red sea. Unfortunately, the scale that should be proud of it did not become an advantage, but became an empty shelf.

As mentioned earlier, despite the rapid pace of store opening, Cudi also had the highest number of store closures in the first half of last year. **During the war, as long as Cudi cancels the subsidy or reduces the subsidy, the daily cup volume will be quickly affected.

According to the Tencent database's Dizhou cup volume estimate, in the first week of July, when the newcomer coupons and fission coupons were canceled, the number of Cudi weekly cups has dropped by 52 cups compared with the previous week, and it has dropped by 173 cups compared with the 428 cups during the release of the 1 yuan coffee drinking event.

These and recent "invalid co-branding" are actually pointing to some common problems:Lack of explosive product ability, long-term illness and difficult treatment.

Just as the traffic is a small student, and the strength of the actor is indispensable to the actual performance, the brand wants to seize the right to speak in the fiercely competitive freshly made beverage market, and it is also indispensable to have the blessing of explosive products.

Luckin relies on the popular raw coconut latte to prove its product strength, Hey Tea, Nai Xue's tea and Honey Snow Bingcheng, and also has its own "achievements" such as succulent grapes, domineering cheese strawberries and lemonade. Only Cudi, who debuted for a year, still has only the same "low price" for 10,000 years when he returns.

The lack of explosive products may not be a big problem in the early days, but it is certainly not conducive to the long-term development of the brand.

With the increase in the number of co-branded activities brought about by the increase in Cudi, more and more consumers have begun to realize that low prices cannot become a fig leaf for insufficient product power.

Whether it is the joint name with "The Legend of Zhen Huan" and "Spy Playing Home", or the new products launched in cooperation with the "top stream" Wang Yibo, they have all been complained about by netizens indiscriminately. Some people even bluntly said that they bought Cudi not because it was delicious, but because they invited Wang Yibo to endorse it.

* In terms of the chain, the normal shortage of some products and the surrounding area has already caused dissatisfaction on the consumer side and the associated business side, and from the insiders revealed that the Dangtu factory has stopped production, the cost control ability of Cudi may also be affected in the future.

The associates, who are already hopeless to recover their costs due to the slow improvement in the daily cup volume, are not willing to bleed anymore under the influence of multiple factors.

But for now, Cudi must still need an affiliate.

Although the new project Chamao has revised the regulations on human-machine collaboration, there has been no news of the termination of the project. However, if it continues as planned, Cudi will have to act more from the perspective of making them profitable, as the affiliates want.

But it is not destined to be easy.

According to the "2023 New Tea Drink Research Report", the market size of new tea drinks is expected to reach 149.8 billion yuan in 2023, with a growth rate of 443%, but in 2024 and 2025, the growth rate may fall to 197% and 124%, the trend of incremental transfer to stock is obvious. In the stock market, where the fight is more tragic to the naked eye, tea cat, as a new brand with a first-class chain that has yet to be perfected, is afraid that it will be difficult to gain the upper hand.

Even if the Tea Cat's project lags behind, Cudi will have to maintain friendly relations with its affiliates and accelerate its pace on how to make a profit, if it wants to open 10,000 stores according to the plan announced earlier.

After all, there are already affiliates who are not even willing to wait until the next spring and leave the market in a hurry.

In the past year, the market has witnessed Cudi go from obscurity to growing popularity, and was even once regarded as a "potential stock" that can recreate the myth of coffee. However, judging from the current situation, it has empty store growth, and its product capabilities, first-class chain capabilities and marketing capabilities have not kept up with the pace of growth.

There are not a few players who aim at the cake of coffee, and if Cudi can't improve the status quo as soon as possible, it will be empty talk to stand in the market for a long time.