Why Korean Coffee Settled in China? There are hidden control risks behind the crazy expansion

In Beijing Guanghua Road Sunshine 100 Business District, the original coffee shop with you has been transformed into "Coffee plus you". Cutlery with a coffee logo is still used in the store, but former posters have been stacked in the corner under the stairs. According to the person in charge of the store, since the decline of coffee with you, the store will consider changing the brand to find its own way out. Before this, the membership card can not be used, the service quality of each store is different, join the store to fight on its own, has been the reason why coffee accompany you has been criticized by consumers.

The mainstream Korean coffee in the domestic market includes coffee accompany you, zoo coffee, diffuse coffee and so on. Originally, according to the brand development plan, by the end of 2015, all three companies had to achieve near-doubling store growth. Among them, the number of coffee accompany you and zoo coffee stores in China is 600,130 respectively, and the goal of opening stores by the end of the year is 1000 and 300, respectively. But in July 2015, coffee accompanied you because the capital chain was broken, and you were joined to discuss debts. Not only the expansion strategy was aborted, but it is still unknown whether the brand can continue; and Zoo Coffee was also exposed not long ago that the franchisee ran away. Korean Coffee has changed from an unlimited expansion to a sharp decline in today's situation.

The cost of breach of contract is low due to poor control.

Stores are closed, franchisees run away, Korean coffee brands continue to storm, exposing the problem of insufficient management control under the rapid growth of enterprise scale. According to RET Rui Yide's "Research report on the Development trend of Korean Coffee Shop in China", Korean coffee brands tend to join or co-operate as the main expansion mode, of which 10% of coffee accompany you and only 4% of zoo coffee. Wang Hongtao, director-general of the China chain Management Association, said that the joining model can achieve rapid expansion, but the operation risk is increased.

For example, if the coffee accompanies you and the zoo coffee adopts the single-store joining mode, the franchisee can operate a brand coffee shop with relatively high degree of freedom after paying the franchise fee, site selection audit and group training. A person who runs a start-up coffee brand said that the operation of coffee shops often depends on the location of the storefront. under the pressure of rent, manpower and other costs, especially in the first two years of business, if there is no good operating efficiency, it is easy to deal a blow to the confidence of operators. Coffee shops with single stores have higher expectations for short-term profits, poor ability to bear losses, and lower default costs, which is also the reason why Korean coffee franchisees are frequently exposed to run away. In contrast, Pacific Coffee uses a single city exclusive agent, while Costa adopts a regional agency expansion model by "bundling" large enterprises, although it raises the entry threshold for partners, but gives the greatest protection to the brand image. It is understood that Pacific Coffee requires 15 stores per city, while Costa cooperates with Yueda Group and Hualian Group in the southern and northern markets.

It takes two years for the maintenance business to make a short-term profit.

There seems to be a contradiction between scale expansion and quality control in the chain industry, but raising the threshold for enterprises to join can reduce the risk of brand damage. For example, at the beginning of the opening of 7-11 in China, the conditions were almost harsh, and the franchisee could only take over the operation from the original poorly run stores, and the franchisee and helper needed full time. Although it deters some people, it reduces the business risk and protects the brand image.

Back to the coffee market, China's coffee market has a huge space. At present, the per capita annual coffee sales in Beijing, Shanghai and other first-tier cities in China is only 20 cups, which is far from the 400 cups consumed per capita in Britain, the United States and other countries. In the face of broad market prospects, there is nothing wrong with Korean coffee brands speeding up horse racing enclosures in China, but in the view of Ji Ming, the first president of the China Coffee Association, coffee shop operation has always been a slow process. He said that the franchise model of coffee chain brand promotion has led many people to see coffee shops as a tool to make money, but running a coffee shop is actually a process of training consumers to develop coffee drinking habits. It usually takes three years for a coffee shop to turn a profit from formal business, and operators need more patience to cultivate the market, rather than focusing on short-term profits.