Ruixing Coffee may break up Little Deer Tea to launch a "partner" plan, response: no comment

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According to an exclusive report on Lianyun.com today, Luckin Coffee has launched a partnership business model for his new product Xiao Lu Tea. The first batch of "Xiao Lu Tea" stores will open in mid-October this year. In addition, Ruixing may break up Xiao Lu Tea as a subsidiary. Lucky officials declined to comment.

According to Lianyun.com, Luckin Coffee has launched a partnership business model for his new Xiao Lu tea, and the first batch of Xiao Lu tea stores will open in mid-October this year. The newly opened Little Deer Tea store, which is different from Luckin Coffee's, will adopt the new sign "Little Deer Tea" and mark it as a "brand under Luckin Coffee". This means that the income and loss of Little Deer Tea business may be separated from Lucky's financial report.

According to Luckin Coffee's customer service, its newly opened Little Deer Tea store will be more inclined to the tea market than the original Luckin Coffee store, selling several types of coffee featured by Luckin Coffee, but more than 30 new types of tea. In addition, Luckin Coffee will also develop an independent APP for Little Deer Tea, which will be interconnected with Luckin Coffee APP, which also means that user information and coupons can be exchanged between the two APP.

At present, Luckin Coffee officially said he would not comment on the partnership model and split plan of Little Deer Tea, but according to Luckin Coffee's customer service, this model is not joined by the partner, but is operated jointly by the partner and Luckin Coffee. What is different from the traditional brand joining model is that Ruixing still retains the right to operate the Little Deer Tea store, although it has to co-operate with the partner. And the partners will bear the pre-storefront decoration costs, equipment procurement costs and join the small deer tea brand margin, a total of about 300000 yuan. In this way, for Luckin Coffee, the cost of running a small deer tea store will also be greatly reduced, and there is also the possibility of independent financing in the future.

Luckin Coffee launched a series of deer tea in July this year and announced his official entry into the tea market. At that time, some people said that this was the main force for Luckin Coffee to develop the sinking market. It is speculated that little deer tea will be split into subsidiaries after just over a month of national launch, or it may be affected by the pressure of store operation. Ruixing, which previously held investor banknotes and opened a crazy expansion model, has also begun to face up to the problem of profits and losses, which may have something to do with Ruixing's first financial report after listing. On the evening of August 14, Luckin Coffee released his financial results for the second quarter of 2019. According to the data, Luckin Coffee's revenue in the second quarter of 2019 was 909.1 million yuan, and the market is expected to be 909 million yuan. The net loss in the second quarter was 610.8 million yuan, an increase of 83.4 percent from 333 million yuan in the same period in 2018.

Although the loss is expanding, Ruixing is trying to stop the pace of store expansion. Start selling coffee, expand the tea market, launch profiteering periphery, lucky product line blossoms in an all-round way. Judging from the history of Luckin Coffee's development, its entry into the tea market is not necessarily a recent decision, so the news that it wants to split Little Deer Tea as a subsidiary also has great credibility.

Source: Lianyunwang, 36 krypton, etc.

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