The capital-intensive + Internet model strategy finally appeared in the chain coffee industry after the convenience store and supermarket industries became popular.
On November 36 last year, Krypton reported that Qian Zhiya stepped down as the COO of Shenzhou Youche and started a business as lucky coffee (Luckin Coffee). More than two months have passed, and I have seen coffee stores in many places in Beijing. It is understood that more than 60 stores have been opened in Beijing and Shanghai (mainly small stores about 50 square meters). The royal blue background color + Xiaolu logo makes a clear distinction from other brands on the market, and Tang Wei and Zhang Zhen were invited to be the endorsement, which is obviously a way to fight high.
According to Qian Zhiya, lucky coffee is aimed at the workplace and the younger generation of consumers, providing high-quality coffee that suits the taste of Chinese people. In order to provide stable and good quality coffee, the coffee beans used by lucky coffee are better than Starbucks (the market circulation price is about 30% higher than Starbucks). The product team is led by many WBC competition champions, and the in-store equipment adopts world-class brands such as SCHAERER and FRANKEE.
Qian Zhiya believes that coffee chain brands, including Starbucks, have not solved the two pain points of consumers. One is that coffee is too expensive, and the other is that it is inconvenient to drink coffee: European and American coffee prices account for one thousandth of consumers' monthly income, while China accounts for one percent; there are few professional coffee shops, and Taiwan has a population of 23.5 million with more than 5,000 CITY CAFE outlets (CITY CAFE is a freshly ground coffee brand of 7-Eleve, which has led consumers to drink affordable freshly ground coffee), and Beijing has only 300 Starbucks with a population of 29 million.
In response to the above two pain points, lucky coffee lowers the product price on the one hand. The price of a cup of latte for in the store is 24 yuan (other brands are 30-36 yuan), and a cup of American is 21 yuan (other brands are 27 yuan) . On the other hand, the intensive store opening + takeaway strategy is adopted to try to cover multiple business districts. Takeout is provided with SF Express services and is delivered in about 15 minutes, and promises compensation for more than 30 minutes.
We can see that similar to new retail projects such as Convenience Bee, Xing Convenience, Hema Fresh, luckin coffee has three characteristics:
First of all, the market space chosen is large and there are obvious pain points. China's coffee market has nearly 100 billion yuan, and the annual growth rate of freshly ground coffee is 40%, which has always been Starbucks' largest incremental market. Mainland China consumes 5-6 cups of coffee per year, and only 20 cups in first-tier cities. Compared with the United States, which consumes 400 cups per year and Japan and South Korea, there is still a lot of room for improvement. At the same time, just like China's convenience store industry is extremely immature, there are almost no strong players in China's local coffee chain brands.
Secondly, the founding team composition is similar, and they are all O2O star team + senior retail industry insiders. CEO Qian Zhiya is a founding member of Shenzhou Youche. She has served as a COO in Shenzhou for more than ten years. She has strong online and offline operation capabilities and the courage to lead troops to fight. Most of the founding teams are from Shenzhou Youche, which has strong execution and tacit understanding. In addition, by absorbing talents in fast-moving consumer goods and retail industries, they can make up for possible shortcomings across industries.
Third, both adopt the capital-intensive + Internet model approach. This is also the only way for Internet celebrity teams to enter the retail/catering industry. The core behind it is to take action with a way of thinking and speed that is completely different from the traditional industry.
The so-called heavy capital refers to the intensive and rapid expansion of stores by investing a large amount of capital compared to the speed of opening a traditional coffee shop. has opened 60 stores in two months, which is obviously not the same as the coffee shops that are slowly opening. It requires a lot of financial support and the strong execution ability of the team. Qian Zhiya revealed that the team's own funds, support from friends including Lu Zhengyao, and some lending methods have given luckyin coffee 1 billion yuan as startup capital. In April and May this year, luckyin coffee will also launch a Series A financing to introduce institutional investors. By May this year, it will open 500 stores nationwide, all of which will be directly operated.
. The Internet model refers to using Internet tools and thinking to make changes to the traditional operating model. For example:
1) Use APP to complete consumption methods such as appointments, self-pickup, self-service shopping, etc., to avoid store cash management, increase store turnover rate, and to grasp consumer data in real time;
2) independently develop information systems to improve the efficiency of the entire membership, store, and supply chain management (currently more than 300 people at the headquarters, most of which are technical teams);
3) educates users in a subsidy and preferential manner. In addition to improving cost-effectiveness, also provides free first cup for new users, free coffee for new customers, buy two and get first free discounts, and promotion and rebate methods will exist for a long time to cultivate users' habits with coffee and their recognition of the brand of lucky coffee. In Qian Zhiya's words, he prepared 1 billion to educate users.
Now the entire Internet is discussing new retail, and many practitioners have also entered the retail/catering industry. On the one hand, the disappearance of online traffic dividends has allowed everyone to see the value of the offline real economy. After all, the life cycle of coffee is much longer than that of Internet products. On the other hand, traditional industries also need information and intelligence transformation.
As mentioned above, Internet entrepreneurs also bring new ways of thinking to traditional industries. For example, opening 500 stores in half a year is a radical way, but Qian Zhiya believes that doing things depends on the general direction. The market is good and the direction is right, just do it. "People in this industry generally look at the profit of single stores, but I first look at the general direction. First, popularize coffee to make consumers like coffee and like me. As for when a single store is tied and when to cover the cost, it is something to consider later."
, with the support of heavy capital, the strategy of playing is of course different from that of individual entrepreneurs. Convenience Bee and Xingyi have more than five stores since its opening, which also proves the feasibility of similar strategies. Moreover, compared with SKUs, coffee has many convenience stores and supermarkets with small profits, it is easier to do a good business. Of course, the solid supply chain, standardized products, and refined store operations behind it are top priority in any case, and it requires time to accumulate and polish. After all, the trial and error cost of a store is much higher than that of a shelf.
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