Why did Luckin Coffee, whose share price is falling, choose to be listed in the United States? What can we learn?

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Lucky caffeine in the Chinese market through rapid exhibition stores and fission subsidies and other means, quickly gain a certain share of the coffee market. On the evening of May 17, Luckin Coffee officially listed on Nasdaq under the ticker "LK", setting a record for the fastest listing of startups: 19 months. However, there are netizens in the field of marketing who raised several operational questions for Luckin Coffee's listing.

First of all, with regard to Luckin Coffee's successful listing in the United States, there are several key figures that I can share with you first. For more information, please refer to the website.

Luckin Coffee set a record for the fastest listing of startups: 19 months

2370 stores have been opened, and plans to add another 2500 this year

The chain had net sales of $125.3 million and a net loss of $241.3 million

Luckin Coffee's market capitalization will reach 4.2 billion US dollars.

Understand the rationality of operation from the data! Is the operation of Luckin Coffee healthy?

Many people wonder why Luckin Coffee chose to be listed in the United States. And think about the quality of opening a store and the related costs:

First, why not list in China and go to the United States?

Second, the essence of business is to make money, relying on subsidies to increase the market share, supplemented by other profit models? What other profit models will there be?

Third, from the first store to 525, an increase of 500 stores in about seven months, is this quality really feasible?

Fourth, the income / number of stores is equal to 460000, and the average turnover of a store is 37000 / month. from a normal business point of view, is it normal that the turnover of a store is 37000 / month?

Fifth, financing history, mostly loans, guarantees or loans?

As for the part about the storefront, there are also some people who wonder:

1. The number of customers served in each store has a certain ceiling. Assuming that the average number of cups per store is 112 cups per day based on 10 yuan per cup of coffee, is this data correct?

Second, suppose the growth from 4.4 billion cups to 8.8 billion cups, a double growth, according to the above information, can be changed into 224 cups per day-336 cups per day. Does the increase in turnover mean that human capital must increase at the same time?

Third, suppose Ruixing wants to continue to push users higher, excluding all objective factors, in order to double the marketing budget, so as to double the number of users, isn't that a waste of money and more?

Fourth, as far as the coffee shop is concerned, what the product earns the most is coffee?

In view of the above problems, many netizens responded. Among them, the extract is excerpted as follows:

Observation of Morris Lin

To find the best way to raise capital, Nasdaq is a securities market with looser fund-raising conditions, which may be one of the reasons for listing in the United States to make a profit from rotating equity trading.

The retail service industry consists of three main structures: human, store and commodity. Compared with Starbucks, Little Blue Cup is a news marketing topic, which raises Lucky's commodity level to the same level as Starbucks, but actually comes to the store to buy and observe, it sets the opponent is hand shop and convenience store, Starbucks sells brands and atmosphere, so the investment in stores and people is relatively high, with high-quality service manpower and high-end style space atmosphere, but the current investment in human stores is far less than Starbucks. So it can show the store quickly. As for commercial coffee, a cup of more than 20 yuan RMB, I think it has enough gross profit space for marketing activities.

Lucky through App+ delivery, greatly reduce personnel costs, want to drink coffee through App to complete all the transaction process "recorded all important information, including consumption information and positioning", accumulated huge amount of information, is an important asset. And App downloads to a certain scale, began to have raw material bargaining conditions, but also the conditions to become a media platform, the formation of a model to increase revenue and reduce expenditure, it seems to see some dawn of profit.

The huge physical stores and precious personal consumption information under the cable finally turned from losses to profits, and Meimei's financial report felt like an item that sold very well.

Jeff Fan's view

Basically, these problems fall into the same thing. Luckin Coffee is a retail store with non-retail thinking.

We still have to have this dream ratio. The cost-to-profit ratio only begins after listing. In the United States, we can enlarge the capital again and give it a chance to globalize in the future.

It's right to make money in the nature of business, but don't forget the saying: the real top-level design of the business model should be seen thoroughly. In fact, Lucky is still the product of Internet +. Starbucks sells cafes. Ruixing sells coffee, so why not reduce the cost to users for better products? At present, there is no profit model, but in the future, his model must be an intensified takeout model, and even Laoyang Square Cake has become their product line!

The quality of opening a store, in-depth study, you have to remember which system he is. The business model of China system has always been asset-heavy operation, their CEO and founders are China system, the quality can be improved on the system, all the operations of the POS machine are reverse design. When you get to the store, download App, the first cup of coffee is free, the clerk only needs to guide you to download App, this is just one example.

37000 / month, take a closer look at 2018, he did 841 million yuan a year, 2019 Q1, did 479 million, only spent three months, the customer acquired after the user adhesion is the ultimate goal, many office locations are opened up, equivalent to helping the property to increase additional income.

The purpose of financing is to complete the problem and get bigger quickly, which is different from the foreign concept of financing. In fact, listing is also a loan relationship, but in the rules of the capital market, from angel,ABCD to pre-IPO, these all have to be accepted by someone. In the end, 20% of the shares will be picked up by retail investors. The problem is that those VC of IPO foreplay have to appear in one year, so this financing and lending relationship with Taiwan. Not quite the same, there will be a financial roadmap + share release ratio, and KPI will be set to achieve the goal.

What can we learn from Luckin Coffee's listing?

In the case of Luckin Coffee's successful listing, it is indeed difficult for small and medium-sized enterprises to go public at a loss and subsidize the fission. But there are a few things that marketers should learn from.

1. Positioning

Although Luckin Coffee regards Starbucks as China's number one competitor, there are still some differences in positioning.

From the manifesto issued by Luckin Coffee in Nasdaq, it is not difficult to see that he regards people who buy Starbucks as consumption of "coffee shops". On the other hand, the friends who bought Luckin Coffee returned to the "coffee essence". Hit the Starbucks brand premium on the one hand, and the market to return to product quality on the other. It is conceivable that Toyota and Lexus are grabbing the market share.

two。 Competitive strategy

Starbucks represents a century-old classic brand and follows the traditional routine of brand exhibition stores. Give people some taste in the space feeling, symbolizing a kind of style. And Luckin Coffee belongs to the market latecomer, in the face of strong brands, choose the mode of Internet + to cut. Through App sales, retention of membership information, through fission marketing to reduce unfamiliar development costs and obtain a large number of users. Through the delivery service, make up for the deficiency of Starbucks in the store market.

"Our mission is to be part of everyone's everyday life, starting with coffee"

The above sentence is the content of Luckin Coffee's prospectus. Perhaps, getting a large number of users is the central idea of Luckin Coffee's competitive strategy.

The editor also believes that Rui Xing's copywriting in Wen's declaration of war is very attractive. For example, what is the difference between Chinese coffee and American coffee? The difference is self-confidence. All these are worthy of our reference.

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