At the 19-year strategic communication meeting, Qian Zhiya, founder of Ruixing coffee, said that more than 2500 stores would be built nationwide, pushing the total number of stores to more than 4500. Ruixing coffee's strategic blueprint this year is to surpass Starbucks in terms of stores and cups.
Ruixing coffee, which only suffered a loss of more than 800 million yuan in September of 18 years, made such a grand plan in 19 years. According to Qian Zhiya, Ruixing coffee was a strategic loss in the past and fully met the target expectations. The general purpose is to make coffee return to normal prices and break the monopoly.
From the data, Ruixing coffee had 12.54 million users in 18 years, and the sales volume reached 89.68 million cups. There are 1897 physical stores, and the self lifting proportion has increased to 60%, which can basically meet the needs of the public.
According to Ruixing, cities such as Beijing, Shanghai, Guangzhou and Shenzhen have achieved full coverage within 500 meters, and users can have a store in five minutes' walk. Ruixing coffee can be seen everywhere on university campuses and companies, with a wide range of users.
Ruixing coffee, which has expanded so fast, can not help worrying about its survival. Referring to the annual expansion rate of 600 Starbucks, Ruixing coffee can be described as "burning money". Whether the market hit with money can realize user viscosity and cash in the later development is a debatable problem.
In fact, we have also seen the strategic adjustment of Ruixing coffee. Including the change from "charging five and increasing five" at the beginning to "charging two and increasing one" at present, and raising the threshold of delivery fee. We don't know whether this strategy is in the plan or not.
However, on the whole, the subsidy strategy is relatively strong in the coffee industry. But how long can this model last? I believe everyone has different views. But it is certain that the discount can really attract users.
From the perspective of the whole company's operation, Ruixing coffee's strategic goal at the beginning is to lead consumers' habits of coffee. From the existing coffee crowd, many people really recognize the Starbucks brand.
For example, the original market situation was that the public believed that Starbucks represented a mainstream brand of coffee. Therefore, many people who like coffee will choose mainstream culture and indirectly give up other coffee brands. That's why Starbucks is so expensive and people still drink it.
Ruixing coffee has identified people who have no coffee consumption habits and opened up their consumption habits through cost advantages. Moreover, this large market is very considerable in China. As long as the ties can be connected, the strategic layout of Ruixing coffee will be faster and faster in the future.
From an ideal point of view, this idea is indeed reasonable. How long can the habit of coffee consumption in China last? If Ruixing coffee can't grasp the cognition and taste of consumers, this expanded layout is tantamount to pushing itself to destruction.
Last year, the overall sales volume of Starbucks declined to a certain extent. I believe that this year, Starbucks will strengthen its efforts to recapture the market and re-establish its brand advantage. This poses a new round of challenges to Ruixing coffee, and the competition will be more and more fierce.
How long can Ruixing coffee "burn money" play? Will it be the second bike sharing ofo?
For a time, many people questioned the money burning mode of Ruixing coffee. After all, in the field of sharing bicycles recently, ofo small yellow cars that are facing difficulties due to money burning have appeared. As a typical representative of burning money in recent years, it is easy to associate Ruixing with the cooling ofo, rapid expansion and burning subsidies. The most exposed problem is the capital chain.
In China, price war is a consistent routine for businesses to attract consumers. Price war can only be played for a while. Consumers may taste fresh because of preferential prices, but in the end, in addition to cost performance, coffee quality and service are recognized. If, like ofo, the stalls are too large, but the service and quality can not keep up, the operation will not last long. After all, burning money can not burn user loyalty.
FuPan Ruixing, and even some places can't catch up with ofo. Both Didi, meituan and ofo have solved some pain points in people's travel or diet, which is also an important basis for didi and meituan to stand out. The problem with ofo is that it sells too much under the acceleration of capital, but the management can't keep up with it. The bicycle damage rate is high, killing the goose lays the egg, paying attention to marketing, but it loses the trust of the most important users, and the last hand of good cards is poor. From tens of millions of people queuing refund, we can see that sharing bicycles is not entirely a bubble, such a large volume of users, in itself is a proof.
In contrast, Ruixing coffee, how many Chinese people really need coffee? Although Starbucks is popular in China, it doesn't sell coffee completely, but it is more a kind of culture and leisure. At least I go to Starbucks more often to talk about things and order a cup of coffee instead of going to Starbucks for coffee. I believe there are many people like me in China.
In other words, people who really need coffee don't necessarily look at Ruixing. People without coffee demand may occasionally choose Ruixing for the sake of discounts, but how loyal is this choice?
I am happy to see Chinese brands challenge the position of international giants, but through the marketing model to cultivate the market, there has been a failed case of "coffee with you" in South Korea, but this time Ruixing has added two marketing strategies of "subsidizing users" and "takeout". Unfortunately, coffee is not just a daily need like travel and three meals takeout, And coffee is not something that can cultivate demand by burning money.
Ruixing coffee has a loss of more than 800 million. Why is it so calm? What gives it confidence?
Different from the concerns of netizens, Ruixing official appeared very "calm" and responded more domineering, "it is certain that our annual loss will be much greater than this figure. It is our established strategy to quickly occupy the market through subsidies, and the loss is in line with our expectations." It can be seen that Ruixing coffee has long expected this situation.
In the end, what gives it confidence?
I. cultivate user habits and win the market
In order to make consumers have a certain understanding of their brand and cultivate consumers' consumption habits, Ruixing coffee adopts subsidies such as "free for new customers", "buy free", "social fission reward" to users, and the opening reward is nearly one year. These seemingly violent means enabled Ruixing coffee to open the market at once and gain a certain brand awareness.
II. Remarkable results in a short time
Since its operation in January this year, Ruixing coffee has achieved explosive growth. In less than a year, 1800 stores have been opened in 22 cities, and 500 meters of full coverage has been achieved in the core business circle of first tier cities. It took Starbucks almost 13 years to reach this scale. Recently, Ruixing coffee announced that it had completed the plan of opening 2000 stores in advance.
III. China's coffee market has great potential
Relevant statistics show that at present, the average growth rate of the global coffee market is 2%, while China's coffee consumption is growing at an alarming rate of 15% per year. It is expected that China's coffee market will reach the trillion level by 2025. Therefore, China is the most potential coffee market at present, and the popularization of coffee culture and the acceleration of urbanization are the driving force of growth.
IV. investors continue to pay
The reason why Ruixing coffee can make such a large-scale capital investment can not be ignored is that investors have given sufficient financial support.
From the perspective of financing, investment institutions still favor Ruixing coffee. They have obtained more than 100 million financing twice in the last six months. Some experts believe that if money can be burned to rebuild a Starbucks, someone is willing to bet. Didi also burned $30 million a day at that time. Ruixing gained such a large user scale and market in only one year. Although it was completed by burning money, these losses are very normal and acceptable in the eyes of some investors.
Although Ruixing coffee still has good development prospects, no one can predict its future. Therefore, for most entrepreneurs, the money burning mode is not desirable. It is easy to burn money, but it is difficult to finance. Taking ofo as an example, reasonable internal planning and ensuring product quality are the beginning for enterprises to finally embark on the right track and sound development.