Lucky Coffee explodes a big trick of "cash subsidy": scan the data to cover up losses, or pave the way for listing

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Burn money to a new height, cash is moving

It is said that Luckin Coffee is rich and capricious, and he has never seen such a "tuhao" game! Yesterday, Luckin Coffee burned the "money" to a new height-- directly turning on cash subsidies.

Luckin Coffee announced a new round of 10-week cash benefits for "millionaires" on his official Wechat on March 11, with a total amount of up to 50 million yuan. The activity shows that from March 11th to May 19th, if you consume more than 7 items per week (coffee, light food and fruit juice), you can get an average score of 200. if you are among the top 5000 items per week, you will directly receive 4 million yuan in cash! The activity is divided into 10 weeks, with a weekly score of 5 million, that is, 5 million a week, a total of 50 million! You still have money for coffee!? Just ask you one question: the heart is not moved!

During the event, users can use Luckin Coffee APP, Mini Program and Wechat official account to view the number of consumer goods accumulated in personal accounts this week, the countdown to each event, the number of consumer goods of the 5000th user of the current event, the amount of withdrawals from the previous personal account and the number of award-winning users after the end of the current event. After each period of activity, users who reach the standard can only withdraw cash through Luckin Coffee's official Wechat, which is the only channel. Cash will be automatically sent by Luckin Coffee's official Wechat in the form of red envelopes. Receiving valid withdrawals within 24 hours is regarded as giving up on their own initiative.

What makes people feel that Luckin Coffee is "full of sincerity" is that the threshold of this activity is much lower than that of "dedication"! You can participate in this cash subsidy program as long as you buy enough of any 7 items (except discounted items with coupons) through Luckin Coffee APP or Mini Program within a week. Even, fearing that you don't like his coffee, Luckin Coffee launched nine lucky snacks with a 6.60% discount a day earlier to match existing coffee, light snacks and fruit juices.

Seeing here, I believe that as long as it is not someone who has stepped on thunder and is particularly fastidious about taste, he will have the impulse to download APP and issue an order immediately. Of course, people with many minds will also have doubts: there is nothing to be courteous, either adultery or theft. What on earth is Luckin Coffee doing in this wave of "cash subsidy" marketing?

Be courteous for nothing, either rape or theft?

Lucky said publicly: the purpose of this cash subsidy campaign is to quickly achieve the flag-- "2019 to become the largest chain coffee brand in China", and their determination can be felt from the strength of the activity.

In fact, on January 3, 2019, Luckin Coffee revealed at the strategic communication meeting that he aims to build more than 2500 new stores and more than 4500 total stores in 2019. In terms of store and cup volume, it will become the largest chain coffee brand in China.

But goose, is it really that simple?

What is comparable with the speed of opening a shop is Luckin Coffee's "speed of burning money". According to Luckin Coffee's B-round financing plan, its cumulative sales income in the first nine months of 2018 was 375 million yuan and a net loss of 857 million yuan. This also means that it burns an average of 100 million yuan a month. To this end, Luckin Coffee has begun to quietly narrow the intensity of subsidies, which is also generally interpreted by the industry as that in the face of the coming capital winter, Luckin Coffee no longer adhere to the previous flow-based strategy, but began to focus on performance, and strive to attract more traffic and orders to make their own sales data more beautiful.

As we all know, Luckin Coffee fission marketing played well, since the launch has been crazy for consumers to send coupons to send welfare. First of all, as long as you download luckin coffee App, you can get a free cup of coffee. App has also been tweeting "give coffee to friends for free, each get a cup". Just share the link with (non-member) friends who download App and each can enjoy a complimentary drink with you. There are also various activities from time to time, such as coffee treat, "fill two get one free", "charge five get five free" and 50% discount coupons.

And this time directly play with the "cash subsidy", some outsiders interpret Luckin Coffee's move as "whitewashing the data to pave the way for listing." according to a source familiar with the matter, Luckin Coffee's main purpose is to pave the way for listing. The person familiar with the matter said that Luckin Coffee has now entered the stage of negotiations with brokerages, Luckin Coffee loss situation is difficult to change, can only be used to subsidize the brush to make the data better.

The amount of subsidized brushing only paves the way for listing?

Since 2019, there have been numerous rumors of Luckin Coffee listing. At the beginning of the year, there was news that the company might be interested in listing in Hong Kong and had registered a company abroad. Since then, it has been reported that Luckin Coffee has contacted three investment banks, including Credit Suisse, Goldman Sachs and Morgan Stanley, or IPO in the United States this year.

The rumors are complicated and confusing, but the core all points to the same goal-listing. Luckin Coffee repeatedly shot, have been interpreted by the outside world as paving the way for listing, in fact, it is not surprising.

Entering 2019, the attitude of the capital market towards new retail coffee, such as Luckin Coffee and Lian Coffee, has changed. Since the beginning of the year, Lian Coffee has begun to close a large number of stores in major cities across the country. To carry out a round of adjustment and optimization of stores that are not profitable and early do not meet the requirements of the brand, the reason behind even Coffee's eagerness to take off the hat of loss is that it is more important to see the flow of retail coffee than capital in 2018. On the eve of the cold winter of 2019, capital is now more concerned about the profitability and liquidity of re-retail coffee brands.

Compared with Lian Coffee, which still has a chance to "make a profit again," Luckin Coffee's "speed of burning money" determines that it can never turn a loss into a profit in a short period of time, and the only way out is to get more financial support. In addition to the new round of financing, listing has become a top priority for Luckin Coffee: Chengshi will shake Starbucks for the throne of China's largest chain coffee brand, while losing may become the coffee industry's "ofo" whose future is uncertain.

However, no matter how fierce the coffee war is, we don't know who will win in the future, but the biggest winner should be the consumers who like coffee.

Photo source: luckincoffee Luckin Coffee

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