Big counterattack! 9.9 Coffee "beat" Starbucks China

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The year 2023 has been an extraordinary year for Ruixing, a local coffee chain. During this year, Ruixing made a record of 100 million daily sales by virtue of the Maotai Maotai latte fire, which let more people who do not know coffee know about the Ruixing brand.

Also relying on nearly a year of low-cost coffee discount war with Cuddy, Ruixing brought "9.9 coffee" into the lives of caffeine-hungry workers and changed consumers' impression of the original price of coffee. In addition, Lucky is also known as the "joint demon". Popular IP, such as Line Dog, Cat and Mouse, Xiaolan and his friends, have all partnered with Lucky to attract consumers to spend for joint products.

Increased brand awareness and the attractiveness of discounted coffee have contributed to a surge in sales of Lucky in 2023. According to Lucky's 2023 financial report, Lucky sold more than 2 billion products, with total sales of 24.86 billion yuan ($3.45 billion). The revenue reached an all-time high and far exceeded Starbucks China, which has a total sales of 3.16 billion US dollars. Successfully replaced Starbucks China as the largest coffee chain brand in China.

The scale of more than 15000 stores and the continuous updating of joint activities all show that Lucky is in excellent condition, and it is no accident that Ruixing has become the new leader in China's coffee market. however, the recent shrinking activities of Ruixing stores seem to be a sign that the good times will not last long.

Judging from Lucky's financial report data, 9.9 promotions may lead to a sharp increase in Lucky's marketing expenses, coupled with the influence of seasonality, Wandian festivals, fierce industry competition and other factors, profit growth has slowed down. In order to improve the profit margin of her products, Luckin Coffee adjusted the weekly "9.9yuan coffee" promotion launched in May last year, reducing the scope of activity coupons for most drinks in stores. At present, there are only 10 products that can use 9.9yuan coupons on App.

In addition, the problem facing Lucky is not just the low profits brought about by the 9.9 event. After opening special spots to join, Lucky opened more hospitals, schools, scenic spots, etc., the number of stores increased to 16000, of which the number of self-operated stores exceeded 10, 000. In the future, the Chinese market may not have enough room for Ruixing to maintain this rate of store expansion, and the slowdown in store opening means that Ruixing may not be able to increase its performance by increasing its size, but can only strive to increase store revenue to increase revenue.

Guo Jinyi, chairman and CEO of Luckin Coffee, said that with the increasingly fierce competition in China's coffee industry, and with uncertainties such as seasonality, Ruixing's next performance may be affected to some extent, but for better or worse, Ruixing will firmly promote the current pricing and development strategy to ensure business growth and market share. At the same time, Ruixing will also go abroad to expand stores into the future planning, actively looking for new markets suitable for Ruixin's development.

Picture from: Internet

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