? After reading some articles, many people think that Luckin Coffee’s competitor is Starbucks. In order to open up the market, it keeps burning money and losing money. In the end, it will be unable to withstand the financial pressure and become the next ofo.

At the beginning, I also thought that Luckin Coffee would not last long, but the more I studied, the more I discovered that it would not last long if it only made coffee. However, he is not, he wants to do more than just coffee. , the benchmark is not just Starbucks, but a system of snack foods to meet more scenarios and needs of each consumer. As the mission says, start with coffee and become a part of people's daily lives. Luckin Coffee has a broad vision, and every step it takes has actually been written into the script. Coffee is just the first step, and its strategic layout will be slowly revealed later. Below, I will analyze it in these aspects: capital, market, product, data.

Luckin’s development is actually a game for capitalists. They are well aware of the Internet’s routines, know how to burn money, raise funds for development, and create a systematic product. Currently, there are 9 people on Ruixing’s board of directors. Excluding the independent directors, 4 of the 7 people are from China Car Rental, accounting for more than half of the company. In addition to knowing cars best, the rest is capital operation.

The story of the former Shenzhou Car Rental began in 2007, and then expanded rapidly. In 2011, the funds could not keep up, and it was heavily in debt. Finally, it was listed in Hong Kong in 2014, which eased the financial pressure and allowed it to develop. The scale of car rental is now second only to Didi.

Today’s Luckin operates in a similar way to China Car Rental. From 2017 to now, we have been opening stores like crazy, constantly burning money and subsidies, and quickly occupying the market.

The following chart shows Luckin’s revenue and losses:

Seeing these data, Luckin undoubtedly suffered huge losses. You may say that this is just like ofo. The money burn is getting bigger and bigger, the capital turnover cannot be increased, and finally bankruptcy is the end. However, these expenditures have actually been planned long ago, because the expansion goals of market customer volume and scale have been achieved. As Qian Yazhi said: It is not important to burn money. What is important is that the money burned can be recovered later. So these are included in strategic losses. Even the subsequent launch (which took only 18 months and the number of stores reached 2,370) was actually planned well and was based on a script.

It can also be seen from Li Hui’s answer to a reporter’s interview:

In the second half of 2016, he first started discussing this issue with Lao Lu and (Qian) Zhiya. coffee idea, and then the discussions became more and more in-depth and intensive, including all aspects of the business model, including market strategy, brand strategy, company organizational structure, financing strategy, and possible go-to-market strategy.

This is the financing schedule of Luckin Coffee

If Luckin Coffee wants to establish a snack food system, immediately disruptive customer acquisition, and explosive growth, it must seize a Highlights of marketing model. This highlight is reflected in two aspects:

01 Starbucks is the first choice

In the coffee market, a stable situation has been formed for a long time, with Starbucks first and Costa second, which is difficult for anyone to break. , and Luckin Coffee unexpectedly broke the long-term stable situation with a new consumption model and rapid store opening, instantly attracted attention, and captured people's curiosity and early adopter characteristics. At the same time, it can also use the halo of competitors to reflect its high quality, reminding people that it is on the same level as Starbucks, and satisfying the petty bourgeoisie of white-collar workers.

02 New Consumption Model

Luckin Coffee has launched its own app for ordering and offline consumption. It has also set up a quick-service store, a Changxiang store, and a take-out kitchen to meet the needs of customers. In order to meet the needs of different scenarios, it also attracts potential customers with large subsidies.

Through these methods, Luckin Coffee quickly occupied the market and has now become a chain store second only to Starbucks. It has established its own brand, making people familiar with it, and gradually entering into people's lives.

From the beginning to the present, in addition to coffee, Luckin also regularly launches many light foods, covering different demand scenarios for afternoon tea, and gradually forms a system.

After all, coffee consumers are a minority in China. The market still needs education, but it takes a long time. Luckin cannot afford it, so it has chosen to enrich its product types to meet the needs of different groups of people. , which can also greatly reduce distribution costs during the distribution process.

Ruixing established its own data platform from the beginning, connecting the technology and the entire operation system. As long as an order is placed, all information will be reflected in the backend, and then it will be analyzed based on these data to decide the store address, selection products and distribution. The entire supply chain relies on the platform for accurate analysis and judgment. In the later stage, it can also conduct detailed portraits of users and accurately push information. In this era of big data, the value of user information is huge, so Luckin considers strategic layout from a relatively long-term perspective.

Through these aspects, Ruixing told investors that to set up a good situation, losses in the past two or three years are normal. Investors should be vaccinated in advance, and then through financial data, Step by step, these losses are within the expected range and are forming economies of scale, reducing costs and expanding revenue.

Therefore, I am personally quite optimistic about Ruixing. If you pay attention, you will find that Ruixing Coffee has been renamed "Ruixing Investment", and this also verifies his ambition.