Author丨Noyan.
In the past year, China's chain coffee market has reached a new height.
On December 13, 2023, the latest report released by the research institute "World Coffee Portal" shows that China has surpassed the United States to become the world's largest market for branded coffee shops.
After entering 2024, the competition in the industry will only increase.
At last month's associate meeting, Cudi Coffee said that it would increase subsidies, and during the explosive product period, the subsidy line will be based on the theoretical cost of raw materials +35 yuan calculation, less than the subsidy line, subsidy to the subsidy line.
But Cudi's subsidy is "conditional".In addition, some affiliates found that the headquarters also revised the relevant rules for material ordering, and the new raw materials were uniformly pushed by the headquarters, and the stores were determined or adjusted within two hours, and even began to force the affiliate stores to order wine.
Faced with the subsidy policy mixed with "private goods", more and more affiliates began to express their dissatisfaction on social ** platforms, and Cudi finally had to make an emergency adjustment two days after the implementation of the new policy, announcing the suspension of implementation.
However, Cudi's "New Deal turmoil" has not completely subsided, and the sniping of old opponents has quietly arrived.
Recently, Luckin Coffee's subsidy to affiliates has been upgraded again, saying that on the basis of the existing single-cup gross profit subsidy to 4 yuan, it will increase the single-cup gross profit subsidy for stores with a total gross profit of 6<0,000 yuan for ready-made goods in the current month
That is, 50,000 The gross profit of the total ready-made goods in the month < 60,000, and the gross profit of a single cup is less than 45 yuan, subsidy to 4$5;
The gross profit of the total ready-made goods in the month was < 50,000, and the gross profit of a single cup was less than 50 yuan, subsidy to 5$0.
Compared with Cudi's conditional "special subsidy policy", Luckin's plan is obviously more direct and sincere, in the face of the pressure brought by old opponents, does Cudi still have the strength to continue to "follow the cards"?
Cash flow is tight, Cudi raises the "white flag" first?
Looking back at this battle in the chain coffee market that has lasted for a year, it was actually provoked by Cudi Coffee at the beginning.
In February last year, Cudi launched the "Coffee Carnival in 100 Cities and 1000 Stores", during which 6 series of more than 70 hot-selling products were all 9Starting at 9 yuan**, you can also buy 8 on Douyin$8 voucher.
But when Luckin began to show the attitude of "accompanying to the end", Cudi, who took the lead in provoking the "money burning game", was quite lacking in confidence.
First of all, Cudi is gradually eliminating the subsidy policy for franchisees. According to the "Red Star Capital Bureau", franchisees who complete the contract before April 2023 will be exempted from 5-100,000 yuan in service fees depending on the type of store they open, and at the same time, they will also set up a minimum guarantee policy, if the franchisee incurs a loss, Cudi will make up the difference in losses.
However, for franchisees who signed contracts from April to June 2023, there is no subsidy for reducing service fees, and there is only a new store marketing subsidy of 50,000 yuan. This selective subsidy policy, in addition to attracting associates to enter the market as soon as possible, also proves that Cudi's cash reserves at the beginning are not abundant
Secondly, after opening nearly 7,000 stores in a year, Cudi, whose business form was not healthy enough, has fallen deeper and deeper into the "quagmire" of burning money, and its cash flow situation has become worse.
As early as June last year, Douyin blogger Brother Qiang chatted about the new catering in its ** broke the news that Cudi's cash flow situation may not be optimistic, and it has begun to settle with ** merchants through bank acceptance bills. At that time, a person familiar with the matter revealed that the settlement cycle of Cudi to the ** merchant is 45 days, and if the acceptance bill is true, according to the 6-month acceptance bill, the equivalent account period will be extended to 225 days.
Source: Douyin).
In addition, in response to Cudi's recent behavior of forcing affiliates to sell Maotan liquor and initiating the automatic ordering of the system, there are also views that it is a manifestation of Cudi's tight capital chain.
Finally, combined with the existing information and data, it can also be found that the current cash flow situation of Cudi is not optimistic.
Source: China Merchants ** "Coffee Industry In-depth Report: Cudi vs Luckin, 99 yuan ** battle "who dies the deer").
According to the estimation of investment promotion, Cudi's revenue is based on the cash flow of new stores (10-150,000 stores) and the profit of raw material chain (0.).7-0.80,000 stores per month) and stock store commissions (0.60,000 stores per month).
All things considered, Cudi's main income in 2023 can barely cover expenses, because marketing expenses alone will burn 1-1 every quarter500 million yuan, and the subsidy for associates also needs to be spent 08-10,000 stores per month, in addition to Douyin distribution expenses, management salaries, ** chain expenses and R&D expenses, etc., add up to a small amount.
In the face of the old opponents who are now approaching step by step, not to mention "following the card", it is doubtful whether Cudi's follow-up subsidies can be sustained, and the ** battle of the chain coffee market that lasted for a year may soon come to an end.
Financing is difficult and store expansion is slow
How long can Lu Zhengyao's subsidy last?
Cudi Coffee's business model is actually a land-based style of "burning money for scale".
That is, to attract consumers through low prices, use the phenomenon of business prosperity to attract associates to join, earn deposits, shares and equipment raw materials and other expenses, and then continue to subsidize and maintain low prices to attract consumers.
The business model seems to be circular, but only if Cudi has a steady stream of money to sustain the subsidyThis also means that Cudi must solve the long-standing cash flow problem as soon as possible at this stage, otherwise, the hidden dangers of this link will accelerate the "collapse" of Cudi's entire business model.
However, Cudi doesn't seem to have found a suitable solution yet.
If you want to alleviate the pressure on cash flow, the easiest and most direct way is to seek external financing, but this road has become extremely difficult because of Lu Zhengyao's existence.
After all, due to Lu Zhengyao's credit problems, it may be difficult for Cudi to have new external channels to obtain financing, and recently, the information of the China Enforcement Information Disclosure Network also showed that Lu Zhengyao added a new information on the person subject to execution, the execution target 781780,000 yuan, Cudi's hope of gaining the favor of capital has become even slimmer.
Source: Tianyancha).
So far, he has not received financing, and Cudi can only "continue his life" by opening a store and relying on "blood transfusion" by associates, but this plan is obviously not sustainable.
According to the data of the restaurant owner, since September last year, the growth rate of Cudi stores has slowed down significantly, from more than 1,500 new stores per month to about 500 new stores in September, and the number of new stores in the month has fallen to the brand start-up period, with only 296 and 173 new stores added respectively.
Source: Restaurant Boss Internal Reference).
The dwindling number of new stores, coupled with the recent move to force affiliates to sell alcohol and require automatic ordering, has not only dissuaded a large number of onlookersMoreover, many affiliates are already preparing to "cut the meat and leave the market", and Cudi's financial capacity may be further weakened
External financing is difficult, the number of new stores has plummeted, and if you want to improve cash flow, Cudi may only have to reduce marketing expenses and reduce low-price subsidies, but once the subsidies are reduced, the low-price advantage is no longer there, and the problems such as Cudi's ** chain and operational capabilities cannot keep up will have nowhere to hide.
Previously, a Cudi associate posted a "Another Letter to the Management of Cudi Coffee Company" on social **, which focused on the supply problem.
The associate pointed out that the Cudi ** chain is seriously disjointed, whether it is daily raw materials or materials, it has been in an irregular state of out-of-stock for a long time, "from the most demanded milk coconut milk to some thick milk that is not used much, and even the packaging materials are accidentally not hoarded, they will not be ordered for a month, and the material arrival date is always one day later than the order is placed, forcing you to urgently order and add delivery fees." ”
For the problem of Cudi's "out of stock", many consumers also resonatesaid on the social ** platform that when ordering in Cudi, you often encounter the situation of "what you want".
For example, the persimmon series, which has been relatively popular recently, many consumers said that "it has not been sold for four consecutive days", "it has been sold out forever", "it has been gone since 9 o'clock in the morning", and bluntly said "If this new product is not done, you will be taken off the shelves, and I will return the coupon".
Nowadays, consumers will pay for low prices, but when the follow-up Cudi can not maintain a fast store opening speed, and can not increase cash flow from the franchisee's gross profit sharing, external financing, etc., and can only reduce the low-price subsidy, its deep ** chain is bound to be exposed to more attention, at that time, consumers without loyalty will only quickly abandon Cudi and throw themselves into the arms of other chain coffee brands.
All in all, the competitive landscape of coffee has undergone tremendous changes, in the current market environment, the "land-based play" of burning money for scale is gradually failing, whether it has efficient operating capabilities and cost advantages determines whether it can get the right to survive in the current market environment.
However, it is still unknown whether Cudi, which has been accustomed to high-speed expansion, can slow down and integrate the first-chain capabilities, run out of the healthy single-store model, and achieve positive profits.