Circle money listed and run Coffee accompanied your founder Jiang Xun to commit suicide, why Korean Coffee lost

Follow the caf é (Wechat official account vdailycom) and found that Beautiful Cafe opened a small shop of its own.

A few days ago, Coffee accompanied your founder Jiang Xun to commit suicide at home, which seemed to imply that Korean Coffee was defeated almost entirely in China.

Circle money, go public, run away

Coffee accompany you is the largest local coffee chain brand in South Korea. It entered China as a joint venture in 2012. Just three years later, there were more than 600 stores in China.

The speed of opening a store is so fast that it depends on a way of "joining + direct operation + cooperative operation", especially the joining system, which accounts for 95%.

Among them, the franchise is divided into 51%, 49% and 100%. At first, coffee accompanies you to encourage the franchisee to choose 60% to 40% of the franchisee type, on the one hand, the company has a say, easy to manage; on the other hand, the franchisee has less financial pressure and rapid development.

Take a standard store of 200 square meters as an example. The franchisee has to pay a fee of about 1.6 million yuan according to the proportion (49%), including 500000 of the franchise fee and brand use fee. Coffee is responsible for store design, decoration, equipment and follow-up management, which is almost tantamount to "paying as the boss." This kind of store, which is called "entrusted alliance" by coffee company, accounts for as much as 80%.

But "entrusted to join" also has limitations, because coffee accompany your company is responsible for the location, if there is a location error, the company will be under greater pressure, so later coffee company you would prefer to join the way of full investment.

For 100% of the franchisees, coffee with you is not responsible for store location and decoration, and can not make a profit from decoration, but coffee with you can still earn 4% of the operating management fee. So in the later stage, there is only one mode of joining coffee with you.

After opening 600 stores in three years, there is a saying in the industry that Starbucks teaches Chinese what coffee is, but coffee accompanies you to teach Chinese how to open a coffee shop.

Almost all in 2012, Holly, Man Coffee, Zoo Coffee, MangoSix and other Korean coffee entered China, through Chinese-funded cooperation, trying to crazily occupy the Chinese coffee market.

South Koreans have accepted the coffee culture for at least 40 years and are completely civilian, while China is still a virgin land. Fuelled by Korean coffee, China's coffee consumption is growing at a rate of 15% a year, compared with a global average of 2%.

Starbucks accounts for 40% of the business group in freshly ground coffee consumption. Korean cafes have a huge advantage-Korean TV dramas.

In 2012, a "King of the House" won the popularity of Hollis Coffee, and then Hollis Coffee entered China in a high profile; then "you from the Stars" became a hit, and the coffee accompanied you to recruit Kim Soo-Hyun.

The blue ocean market, star effect, once pushed the coffee with you to the status of "the first chain coffee in Korea". In 2015, the coffee accompany you even shouted the slogan "the store broke thousands, plan to land on the new third board", with the ambition of still running a thousand miles.

Overnight, however, Korean coffee collapsed like an infectious disease in China. Holly was collected by the supplier, Zoo Coffee was completely taken over by the Chinese, was busy with "de-Koreanization", the most radical coffee was lost with your headquarters, and the headquarters of the Kaitai Building on the East fourth Ring Road in Beijing was also empty.

The negative news of broken funds, unpaid wages and the departure of senior executives is flying in the air like pieces of paper. In 2016, a ban on Korean coffee made matters worse, Korean coffee was completely defeated in China, and a vigorous farce came to an end.

Three major diseases

For the coffee industry, there is no future without the advantage of scale. There are three reasons for the failure of Korean first chain Coffee in China.

1. The expansion speed is too fast.

Due to the excessive pursuit of the speed of brand expansion, the review of franchisees is in vain, and standardized management is at sixes and sevens. Many stores act alone in promotions, with different tastes and even different prices.

Rough management, tight capital chain and hasty location lead to franchisees' losses, and a large number of stores that lack profitability have also become a burden for the benign development of brands and become a vicious circle.

The franchise system is a common means to achieve rapid large-scale expansion. McDonald's is the most adept at using this model in the catering industry, which accounts for 90% of its franchise in the domestic market in the United States.

But the key is that it has a standardized product and service process system. Even so, McDonald's has persisted in direct marketing for quite a long time in China, and it has not been liberalized to join until recent years, and joining is only the transfer of mature stores. Starbucks is still not open to join mode.

2. The ownership structure is disordered.

Coffee accompany you as a Korean brand, entered China in 2012 and established Coffee Management Co., Ltd in Shanghai in cooperation with a company called China Enterprise Investment Group, which is responsible for introducing this brand to the Chinese market.

However, both sides did not deal with the ownership structure well at the beginning of their entry into China. When the brand development encountered problems, South Korea took the lead in withdrawing the funds.

As for the reason, it is said that after South Korea found these problems, in order to maintain the image of "coffee with you", it chose to withdraw its investment after failing to stop it. It is also said that the South Korean side can not compete with the Chinese team in corporate politics, do not have a say and divest.

3. The joining system is unreasonable.

Coffee with you has 95% of the franchise stores, but there are a lot of unreasonable places in the management.

For example, according to the 49% and 51% franchise system, almost every item in the long fee list has the problem of overpricing or false title. It costs 100000 yuan for industrial and commercial licenses and various licenses, and the price of the automatic coffee machine company with a wholesale price of 50, 000 yuan is 120000 yuan. What is even more outrageous is all kinds of deposit. The cooperation between the franchisee and coffee accompany you is a joint venture to open a store. There is no reason for a shareholder to pay a deposit to another shareholder, and many franchisees have never seen the investment certificate of another 51% of the shares in your company with coffee.

The fees of these various names are really difficult to understand, and one of the important reasons why the franchisee chose coffee to accompany you is that it is a big Korean brand, so there will certainly be no problem.

The chaos of joining the market has not been a day or two, and the coffee market is seduced by huge dividends, just like Zhou Yu hit Huang Gai, one is willing to fight, the other is willing to suffer.

The development of Korean coffee is actually a reflection of the current Chinese coffee market: if a brand does not really build its core competitiveness, it will eventually be abandoned by the market.

The robbery of Korean coffee in China

The Great Leap forward and the desire for quick success and instant benefits led to the defeat of Korean cafes in almost all areas of China.

If you have visited Korean cafes, you will find that they are different from those of Starbucks.

They are often very large, hundreds of square meters or even thousands of square meters. Cloth sofas, floor-to-ceiling windows, and plush toys are placed everywhere. Korean coffee creates a casual and warm atmosphere.

Their target consumers are couples, friends or family, hoping to use a larger and more comfortable space for consumers to stay in the store for a long time. Xin Zixiang, the founder of Man Coffee, once said that these consumers who stay in the store will certainly "call friends" and bring more consumers.

This is contrary to the strategy of Starbucks, which focuses on the business customer base. Starbucks stores are small and there are not many seats, and they encourage customers to take out rather than sit in the store.

Korean coffee has an obvious target group, that is, female consumers. In fact, beautiful food, sweet style design and good-looking Korean cafes once became a mecca for young girls to take selfies. But that was when South Korean TV dramas were popular.

But these young women are more of a fresh consumption, and they are not typical coffee consumers in the first place. And China's main coffee consumers, that is, white-collar workers, are basically trained by Starbucks. It is also difficult for these people to be attracted to Korean cafes.

The success of coffee in South Korea's home market is more due to culture.

In the 1930s, Korean "teahouse culture" prevailed, and a teahouse could be found in almost every alley. Although it is called a teahouse, it mainly sells coffee for people to get together. In the 1980s, this old-fashioned teahouse injected some modern elements and appeared in universities, urban areas and residential areas. At this time, the teahouse already has a new name-the coffee shop, no longer just selling coffee, the products become more and more abundant.

It is against this background that Hollis opened its first store in South Korea in 1998 and became the earliest chain brand. Although Starbucks entered South Korea as early as 1999, the coffee consumption market in South Korea was more mature at that time.

In contrast, in China, in the 1930s, the earliest coffee shop in Shanghai opened on the Bund for foreign sailors to enjoy coffee and relieve homesickness. At that time, coffee was called "cough medicine" by Shanghainese.

The coffee shop really entered the Chinese life from the beginning of Starbucks' entry into the Chinese market. Chinese mainland opened its first Starbucks store at the China International Trade Center in Beijing in January 1999.

In addition to selling coffee, Starbucks has spared no effort to convey the "coffee culture" to the Chinese, and now Starbucks has opened more than 2100 stores in China. For Starbucks, China has become the second largest market after the United States.

Although China's coffee consumption market has been growing rapidly, instant coffee still occupies a dominant position, with a market share as high as 70%. Starbucks and Korean cafes, as well as a growing number of boutique coffee, are competing for 2% of the freshly ground coffee market.

Nowadays, in China's beverage market, tea drinks have begun to become a new favorite, and the coffee market has returned to rationality. It is reported that China's coffee consumption market reached 70 billion in 2016, is breaking out at an annual growth rate of 15 per cent, and will reach a trillion by 2025.

With a market size of 70 billion and a market growth rate of 15%, this is still a "thriving" industry, but there may be no Korean coffee.