The pressure of funds for survival of Coffee in Zoo highlights the development prospect of ZOOcoffce

Zoo Coffee announced its new plan for this year yesterday. A reporter from the Beijing Business Daily learned that the zoo coffee will abandon the joining mode and turn to a direct operation in the future, and the overall number of stores will also be greatly reduced. In addition, Zoo Coffee also seeks to "de-Korean", hoping to get rid of the bad reputation of Korean coffee in China caused by a series of closures and runaway, and realize localized operation. According to the analysis of the industry, the zoo coffee that abandons the joining model will face financial constraints, and its performance will fluctuate greatly, and the brand positioning of its Korean coffee has been formed, and the prospect of "de-Korean" remains to be seen.

Abandon and join the expansion deceleration

In early December, the zoo coffee SOHO Hyundai City store suddenly closed before the lease expired, and many consumers who bought the store's stored-value cards had nowhere to ask for the remaining arrears. The incident pushed zoo coffee to the forefront of public opinion. In this regard, Jin Jianyou, chairman of Zoo Coffee, admitted to the Beijing Business Daily that the runaway incident was true. "at present, the headquarters of Zoo Coffee is communicating with consumers who buy stored value cards to discuss the settlement of claims."

Jin Jianyou also said that Zoo Coffee will expand in China in a direct mode from this year. It is understood that zoo coffee currently has more than 200 stores in China, of which franchisees account for 90%. He also said that when the existing franchise contract expires, the company will retain stores with good geographical location and performance, and these franchisees can continue to join and operate in the future. As a result, Zoo Coffee's original plan to have 1000 stores in China by 2020 has been significantly revised to 70-80 new stores a year, reducing the total number of stores by more than 30 per cent.

Financial pressure is highlighted.

Industry analysts believe that the zoo coffee to abandon to do a direct camp can completely put an end to joining chaos, but will also encounter financial pressure for a long time. Franchise revenue used to be the core income, it is relying on a large number of franchisees, zoo coffee can complete the rapid expansion. Take the continued expansion of 70-80 stores this year as an example, after abandoning the franchise model, Zoo Coffee not only lost this part of the franchise fee, but also invested the same amount to expand direct stores.

Jin Jianyou frankly admitted that since the zoo coffee entered the Chinese market, the revenue gained through joining in the past three years has been fully invested in the establishment of companies and logistics centers in Beijing, Shanghai and Guangzhou. Because the zoo coffee stores are too scattered, the logistics costs borne by the company are so large that the company has not been profitable until this year. As a result, the pressure on store rents and operating costs shifted from franchisees to zoo coffee. In order to ease the financial pressure, Zoo Coffee is also in contact with capital. There were earlier reports that Kopi Luwak was interested in buying zoo coffee, which Jin Jianyou explicitly denied. However, a reporter from the Beijing Business Daily learned that the zoo coffee has identified the investor at the beginning of the year, which is also one of the factors that can promote it to join the direct camp.

Want to "de-Koreanization"

Zoo Coffee should not only solve the chaos of joining, but also think about how to quickly eliminate the negative impact of running events on the brand. In this regard, Jin Jianyou made it clear that he hopes to break away from the setting of "Korean coffee" and hopes to form a sharp contrast with the representative coffee of Korean coffee brands that have lost the market.

It is understood that the Korean coffee brand coffee, which has expanded massively in China, has accompanied you since May last year. Since May last year, the capital chain has broken, evacuated its headquarters in China, and owed nearly 10 million yuan in wages for its more than 160 employees in your headquarters for several months. As a result, the Korean coffee model has also been questioned by the market. Korean coffee and zoo coffee, which also open franchise stores in China, have naturally become the focus of attention. The run-away incident of the franchisee of zoo coffee also makes it have to quickly adjust the brand positioning and image, through the "de-Korean" way to rebuild word-of-mouth among consumers. However, according to industry insiders, in view of the precedent of coffee accompanying you and this run-away incident, zoo coffee needs more efforts to win back its reputation through "de-Hanhua".

It is worth noting that there are many active coffee brands in the Chinese market and the competition is fierce. Zoo coffee has formed a homogenized competition with more and more Korean coffee brands entering China. In addition, in the domestic first-and second-tier cities also occupy a relatively stable market position of Starbucks, COSTA and other European and American coffee brands, the financial strength of these brands and market reputation and other advantages are also more obvious. Coupled with the emergence of domestic coffee brands like bamboo shoots after a spring rain, zoo coffee needs to be prepared to fight a protracted war if it wants to gain a stable market and consumer groups.

According to industry insiders, after switching to direct stores, zoo coffee will open more stores around the self-owned logistics system of Beijing, Shanghai and Guangzhou, but this is also the most competitive market, and it will take time to test whether zoo coffee stores can maintain good performance, which is another big test for zoo coffee, which is originally under financial pressure.

Source: Beijing Business Daily