Operating for half a year to become a unicorn, can Luckin Coffee's success be replicated?

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Recently, "Unicorn" has become one of the hottest topics in the capital market. For example, Luckin Coffee, who "burns money" to deliver coffee and is angry at Starbucks, recently announced the completion of round A financing of US $200m, with a valuation of US $1 billion. Become the fastest growing unicorn in China. This is no small miracle in the coffee market.

With the rise of the third or even the fourth wave of boutique coffee, coupled with the Internet model, more and more young entrepreneurs have joined the coffee entrepreneurial army. However, starting a business is a high-risk behavior, and statistics show that the success rate of starting a business is less than 1%, without the support of a huge amount of capital and the control of industry experts. most coffee entrepreneurs face fierce competition, unclear customer group goals, serious product homogenization, barista training and many other problems, resulting in many coffee entrepreneurs are only a flash in the pan. The seemingly simple Luckin Coffee model is actually very difficult to copy.

The threshold of new retail is raised, and the lack of funds should be careful.

On July 11, Luckin Coffee (luckin coffee) officially announced that it had completed round A financing of US $200m, with a valuation of US $1 billion. One stone stirs up thousands of waves, and Lucky's financing news has undoubtedly added firewood to the already hot competition in China's coffee market. Qian Zhiya, founder of Luckin Coffee, revealed at the media conference: at present, Luckin Coffee has burned 1 billion yuan, and a considerable part of it has been spent on user subsidies. At present, there is still a cash reserve of more than 2 billion yuan, and there is no timetable for making a profit.

After Luckin Coffee conducted a round of financing, he has used more than one billion yuan to expand the store and education market, which supports Luckin Coffee's diversified marketing activities, including social customer acquisition and advertising customer acquisition, and provides consumers with a large number of concessions and subsidies.

In addition to user subsidies, logistics management, products and technology, warehousing, users, employees, stores. The relationship between these elements in the new retail needs to be connected. Big data and the application of artificial intelligence technology are extremely important, and these investments require a lot of financial support. Such a high threshold is enough to deter many startups who want to enter the coffee industry.

Technology admission is too high, covering both online and offline.

In order to make it more convenient for users to buy coffee, Luckin Coffee uses online orders and cashless transactions; offline stores are densely opened with flagship stores (ELITE), leisurely stores (RELAX), fast access stores (PICKUP) and take-away kitchen stores (KITCHEN); at the same time, cooperation with SF to carry out high-quality delivery service, which can be delivered in 10 to 15 minutes, to solve the online purchase problem of distribution affecting coffee taste. Committed to the combination of online and offline new retail way to cover the "infinite scene" (Any Moment), through customer data pool management, to achieve accurate fission marketing and social marketing. At the same time, full data operation makes the internal process more efficient and provides perfect services in all directions.

Such high-density, high-precision online and offline cooperation, in addition to the need for a lot of capital investment, the overall technical requirements are very high, the general individual small workshops, small start-up enterprises are completely impossible to achieve.

A solid pyramid structure to maximize personal effectiveness

Any enterprise that expands rapidly will face similar problems: how to manage the team, how to train and motivate employees, and so on. Luckin Coffee set up an experienced management team in a short time, set up a core management team to control the pace of entrepreneurship and development, set up a middle-level team at the same time, and established an incentive reward and punishment mechanism. find the right operation and maintenance and technical staff to ensure the quality of coffee at every step, and a solid organizational structure allows everyone to maximize their effectiveness.

Such an efficient executive team has a lot to do with founder Qian Zhiya's rich management experience and extensive industry contacts. Luckin Coffee was founded by Qian Zhiya, former COO of Shenzhou Youche, at the end of 2017, and went into trial operation in January 2018. Now he has opened more than 600 stores in 13 cities, including Beijing, Shanghai and Shenzhen. Recently, he is preparing to be stationed in Xi'an, the 14th city. Just over half a year, Luckin Coffee has become the second largest chain coffee brand in China's coffee market. Such a record has to be said to be the pride of the team.

The product barrier is difficult to break and the exclusive advantage is becoming more and more obvious.

It is not difficult to make coffee, nor is it difficult to make a good cup of coffee, but it is difficult to make a cup of coffee in large quantities and with a uniform quality standard. The "Master Coffee" provided by Ruixing to consumers has formed its own exclusive advantage with stringent standards, and the product barriers have been unmatched by other similar enterprises. Luckin Coffee's raw material choice is Arabica coffee beans, which are 20 to 30 percent more expensive than Starbucks. Coffee suitable for Chinese taste is developed by a team of international top baristas, using the top automatic coffee machine in Switzerland to ensure that the quality of each cup of coffee is very stable and the taste is consistent. At the same time, luckin coffee has created a "Blue Partnership Alliance", working with six "Blue Partners" to create high-quality coffee, committed to providing the public with cost-effective coffee. At this point, it has exploded many new coffee brands.

The success of an enterprise is affected by many factors, but we can also see from the development of Luckin Coffee the unicorn that the threshold for entry for entrepreneurship is now being raised, which is no longer available to everyone like the mass entrepreneurship and innovation of a few years ago. but to their own resource base, with a certain degree of initial start-up capital of the high threshold business.

As far as the coffee industry is concerned, brand quality, promotion means and user experience are all very important. Ambition is not enough to fight on the battlefield of the new retail. Luckin Coffee model can only be learned, but it is difficult to copy it. On the other hand, the addition of "spoilers" like Luckin Coffee has not only brought competition to the coffee consumption market, but also injected new vitality, looking forward to the emergence of such "new species" in more industries.