The good days of wanting 9 pieces and 9 drinks a casual glass of Luckin are over.
Recently, "Coffee 9The "9 Yuan Era" has just arrived for nearly a year, and there is a posture to turn the page, and the first "anti-water" is the vanguard Ruixing.
Recently, the Luckin Mini Program has been on the weekly 9The optional products of 9 yuan coffee have shrunk to only 8 models, in the topic of Luckin 99 yuan a cup of activity shrunk After being on the hot search on February 18, Luckin urgently announced the return of two seasonal limited coffees, 9The number of 9 yuan coffee has increased to 10, but it still accounts for only a small fraction of its more than 60 drinks.
In addition, Luckin's brand live broadcast room is also difficult to find99 yuan products, the vast majority of products are in the ** range of 10-15 yuan.
When the other players were trying to beat the **, Luckin chose to beat the ** back.
9.9 yuan game, can't afford to play?
Luckin phased out" 99 yuan ** involution", which is comprehensive and moisturizing silently.
The interesting report noted that on the Luckin Coffee app and mini program page, "99" has been relegated to the secondary menu and cannot be ordered automatically. In the designated "Weekly 9Under the 9" menu, there are only 8 products to choose from, of which there are only two signature products, raw coconut latte and velvet latte.
In the official live broadcast room of the Luckin short ** platform, 9The 9 yuan product has also shrunk, and there are currently only four non-signature products 99 yuan, standard American, latte, jasmine latte and orange C American, and limited to 1 order. The rest of the classic or seasonal products** are more than 10 yuan, such as the raw coconut latte is 111 yuan, Luojia cherry blossom latte price 121 yuan, mascarpone cheese latte 14$5.
9.The narrowing of the scope of the $9 discount means that consumers will spend more money to buy a cup of Luckin.
Rui Yu, a white-collar worker in Beijing who averages 1-2 cups of coffee a day, keenly observed the changes, and a few months ago when he was consuming Luckin, with the help of the mini program's "99. Store celebration coupons" with some products in the live broadcast room, you can buy 5 9 at a timeThe 9-second sale price can basically cover a week's coffee consumption. But roughly since the end of last year, the ** in the live broadcast room has begun to change, and star products such as raw coconut latte, raw cheese latte and iced raw coconut latte are difficult to find9$9 **.
I used to choose coffee, and now it's coffee that chooses me, which 9 pieces 9 have to be lucky, if you want to continue 9 pieces of 9 **, you have to accept to drink the style you don't like. Ruiyu said.
In fact, the 9 Block 9 coffee wave has just turned one year old.
The first to set off 9The 9 yuan coffee wave is Cudi Coffee. When the first door landed in October 2022, Cudi's opening promotion was "Luckin Founder 8."8 yuan please drink coffee".
But the real normalization 9The price of 9 yuan coffee will start in February 2023, when Cudi celebrates the "Coffee Carnival of 100 Cities and 1000 Stores", and more than 70 coffees in the audience are priced at 9$9. After that, it was a long "new user limited to 8."8 yuan, new products 99 yuan unlimited" and other activities, completely riveted the ** in 8$8 and $9$9.
Subsequently, in the face of Cudi, a "blood rival" with the same founder, Luckin also launched "99 yuan to drink coffee", at that time, it was just a small-scale and targeted distribution of coupons at the Luckin store near the Cudi store.
And in June 2023, since the Luckin store exceeded 10,000, 9The discount of 9 yuan will be popularized to stores across the country. So until now, once a week to get 9The 9 yuan coffee coupon is still called a "store celebration coupon". Guo Jinyi, chairman and CEO of Luckin Coffee, also said at that time that this preferential activity will be carried out on a regular basis for at least two years.
Well, Luckin "quit 99 yuan game", is it impossible to play or to win?
9.9 yuan game, who is dragging down?
Bringing down opponents, especially Cudi, is often considered a Luckin 9The purpose of the 9 yuan ** war.
From June 2023, it will be fully rolled out 9Since 9 yuan coffee, Luckin has grown by leaps and bounds in revenue and store scale.
In terms of revenue, according to Luckin's latest financial report, in fiscal year 2023, Luckin will achieve a total revenue of 2490.3 billion yuan, about 34500 million US dollars, a year-on-year increase of 873%；Among them, the fourth quarter achieved revenue of 706.5 billion yuan, a year-on-year increase of 912%, and the third and fourth quarters after June are the only quarters in Luckin's history to exceed 7 billion yuan in revenue, and it has firmly sat on the quarterly revenue throne of the coffee industry.
In terms of the number of stores, as of now, the data of Narrow Door Dining Eye shows that Luckin is the brand with the largest number of stores in the coffee industry in the country, with a total of 17,887 stores. Throughout 2023, the number of new stores opened by Luckin Net will be 8,034, of which in the third and fourth quarters after June, the number of new stores will exceed 5,000, far exceeding the total number of stores of chain coffee brands such as Costa Coffee, Tims Tianhao Coffee, Manner Coffee, Nowwa Coffee and M Stand, and close to the volume of the entire Cudi Coffee (6,776).
On the other hand, Cudi Coffee, under the power of Luckin, seems to be in decline.
According to data from Jihai Brand Monitoring, the number of newly opened stores in Cudi has plummeted since reaching a small peak of 1,007 in July 2023, and from August 2023 to February 2024, the number of newly opened stores has declined from 596 to 68 month by month.
In addition, Cudi also reported a wave of store closures at one point. According to Jihai data monitoring, in the 90 days from November 2023 to February 2024, Cudi opened 476 new stores and closed 826 stores, almost twice the number of new stores. However, Cudi quickly explained that the closure figure of 826 stores is mainly due to the temporary closure of university stores during the winter vacation, and will resume normal business after the start of the school year, with a total of 61 stores closed and terminated since the opening in October 2022.
However, the cost of Luckin blocking the opponent is not small, and it is really "a thousand enemies and eight hundred self-inflicted".
According to Luckin's financial report, the launch of 9In the third quarter after the 9 yuan ** strategy, the operating profit margin increased from a high of 189% to 3%, although the revenue in the fourth quarter exceeded 7 billion yuan, a year-on-year increase of 91%, the operating profit fell sharply, from 3100 million down to 2100 million.
According to Tang Xin, president of the Red Meal Industry Research Institute, Luckin's low-price strategy often requires a large number of subsidies to maintain, which will bring certain financial pressure to the company. In order to maintain low prices, the company had to sacrifice profit margins, resulting in a significant decline in single-store profits.
What's more, the war seems to be losing its effectiveness. The logic of the war lies in the fact that the low price is used for drainage, and after the customer arrives at the store, the merchant can convert it into private domain traffic through the products and services in the store, so as to improve the revenue performance. It's just that many people ignore that when the low price ** is only used by some companies or part of the time period, the above logic does hold, but when everyone does this, the low price ** has no effect.
Wang Zhendong, an expert in the coffee industry and chairman of Shanghai Brown Yue Investment Management, also mentioned that coffee consumption is different from catering consumption, and restaurants can have first-class dishes to drain traffic, and then use other dishes to make money back, after all, people will not order only one dish. But coffee is basically only one cup at a time, which ultimately affects the profitability of the company itself.
In other words, low-cost coffee is a "manual work" that goes on the go.
Consumers love 99, or Luckin?
To this day, 99 Coffee's ** game is far more than a cat-and-mouse game between Luckin and Cudi, and its war has already swept the entire chain coffee industry.
In the interviews with interesting reports, many consumers have observed the wave of low prices of different brands of coffee since 2023. Ruiyu said that far more than Luckin and Cudi, jumping out of the brand, it is still a breeze to drink low-cost freshly ground coffee, from chain commercial coffee to chain specialty coffee, "discount" is a key word.
Even though brands such as Starbucks and Costa Coffee tend to have larger stores and mainly sell "third places", the price of coffee has always been higher than that of other commercial chain brands. But now on major discount platforms, such as AutoNavi**, Starbucks' large latte**275 yuan cup, which is equivalent to 69% off. Costa's Americano even has a spike price of up to 88 yuan, which is equivalent to a 29% discount.
Not only chain coffee brands, but now many ready-made tea brands are also selling coffee products, such as Nai Xue's tea has 4 types of coffee including raw coconut latte**99 yuan, Coco Duke's raw coconut latte, latte and other products are also priced at 9 in the live broadcast room$9.
However, in the face of being involved in low-cost games, many brands have expressed their unintention to "participate". At Starbucks' earnings conference in January 2024, Wang Jingying, chairman and CEO of Starbucks China, said that Starbucks has no intention of participating in the first battle, but focuses on achieving high-quality, profitable, and sustainable growth.
Tims Tianhao Coffee told interesting reports that Tims did launch 99 yuan "Maple Coupon" and 99 yuan store celebration coupons and other low-cost coffee coupons, but still do not agree with the "** war". Tims said that if you only sell coffee, the consumption scene is relatively limited, and the threshold is relatively low, so the homogenization will become more and more serious, and in the end it will become a "** war". The "coffee + warm food" strategy they choose can make the barriers higher, and the scenarios that drive consumption growth will also increase.
Among the brands interviewed, only Cudi explicitly expressed a hug. The relevant person in charge of Cudi calculated an account of the interesting report, and under the large-scale operation, the rent cost is about 12 yuan, the labor cost is about slightly more than 1 yuan, and the cost of coffee beans, syrup, milk, and packaging materials is about 55 yuan, water and electricity miscellaneous expenses about 02 yuan, the cost of a cup of freshly ground coffee can reach less than 9 yuan.
Therefore, consumers are willing to experience, affiliates have profit margins, and companies can also have profit margins, and all parties benefit from the **reasonable**.
In Wang Zhendong's view, some brands embrace low prices have their own reason, such as franchise-based brands, earning the best chain, franchisee money, the lower the price, the better the sale, the more materials are sold to franchisees, so this ** game is intensifying, this is the logic of joining the brand. For a brand like Luckin, which is mainly based on direct sales, what is sought is not to make quick money, and low-cost games often reduce the overall profitability of the brand, thereby limiting the ability to expand the market and the cooperation with affiliates.
Wang Zhendong further analyzed that Cudi took the route of "rural areas surrounding cities", and the target brands were often "small town brands" such as lucky coffee, and for the sinking market, it was the first competitiveness. However, Luckin is taking the route of sinking from the high line to the low line, and in the fully competitive first-tier and new first-tier city business districts, the more important competitiveness should be the product itself.
In terms of per capita coffee consumption, the coffee market is still a blue ocean, but in first-tier and new first-tier cities, coffee is already a red ocean, and the next stage may not be the conversion rate of new customers, but the brand's own moat.
Lin Yue, an expert in the catering industry and chief consultant of Lingyan Management Consulting, also believes that the low-price strategy has redefined the entire coffee industry, and the future of coffee needs to make charm, mood and innovation.
Otherwise, coffee is likely to become the fate of pancakes – there is no difference between brand and taste, and the one that is closest to home and cheapest is always purchased.
Almost at the same time as Luckin "got off the table", Cudi announced the start of the three-month "Good Coffee All 9."9 unlimited" ** activities, except for a few stores such as transportation hubs and tourist attractions, all the rest of the stores have 9$9.
It seems that it is still early for the coffee industry to finale.