Lucky to withdraw from the market left a place of chicken feathers, but in the dark, there was a glimmer of light.

Yesterday,LUCKN COFFEE DRC once rose more than 20% in the US stock pink market.。

The so-called pink sheet market is similar to the over-the-counter market in China, where all the stocks traded here are companies that are not listed on the American Stock Exchange or NASDAQ, or do not meet the conditions for listing, are not subject to the supervision of the authorities, have no financial requirements for listing, and do not require regular and irregular information disclosure by issuers.

There is news thatLUCKN COFFEE DRC store has achieved overall break-even.. According to people familiar with the matter, as of July, with the exception of unopened stores, LUCKN COFFEE DRC single store cash flow has been positive. According to the current operational progressOverall profitability will be achieved in 2021。

From this point of view, Rui Xing may still have a chance to get up.

The aftermath of financial fraud

After being shorted by muddy waters, Ruixing "exposed" financial fraud, leading to delisting in US stocks at the end of June.

Although the popularity of counterfeiting has gradually diminished, the whole thing is not over.。

At the end of July, the Ministry of Finance announced that through the inspection of LUCKN COFFEE DRC, it was found that through the fictitious commodity coupon business from April 2019 to the end of 2019, the company increased its transaction volume by 2.246 billion yuan, inflated income by 2.119 billion yuan (accounting for 41.16% of the disclosed income of 5.15 billion yuan), inflated costs of 1.211 billion yuan, and inflated profits of 908 million yuan.

This result is basically consistent with Ruixing's previous internal investigation. Next, Ruixing will be subject to administrative penalties from the Ministry of Finance.

In the American market, Lucky still has huge penalties and compensation to deal with.According to a rough estimate, the class action lawsuit initiated by US investors against Ruixing is expected to claim more than $12.6 billion.Lucky also faces a huge fine from SEC, which will not be less than US $600 million (RMB 4.17 billion) with reference to the Enron fraud incident that year.

Within the company, large and small shareholders led by CRGI have cleared their positions and left the market one after another, and the management has also staged a "palace fight" drama.

In the first round, the board of directors proposed to remove Lu Zhengyao, but there were eight members on Ruixing's board at that time, and the "Lu Zhengyao faction" and the "anti-mainland faction" formed a 4: 4 situation. Lu Zhengyao temporarily retained the post of chairman.

In the second round, before the shares were cleared, Lu Zhengyao held an interim shareholders' meeting and played a bitter trick to remove Lu Zhengyao himself and the "anti-land" Li Hui, Liu Erhai and Shao Xiaoheng, and put "our own people" Zeng Ying and Yang Jie as independent directors.

In the third round, Zeng Ying and Yang Jie, who have been in office for less than a month, resigned at the same time, and the shareholders' meeting will vote on Shao Xiaoheng's return proposal on September 2.

Ruixing's internal and external difficulties are self-evident.

Ruixing's self-help

Financial fraud, delisting, investigation and prosecution, board infighting. Lucky number of monthly active users in the forefront of public opinion.

Interestingly, its coffee sells better.。

In the early days, LUCKN COFFEE DRC's growth mode was quite radical, such as brand advertising, star endorsements, fast shop, high subsidy fission growth (issuing orders to carve up millions of cash, inviting friends to get free orders, free first orders, etc.). But it also brings a lot of problems at the same time. It's okay to have a smooth wind and water. as soon as something happens, these problems are infinitely magnified, pushing Lucky to the edge of the cliff.

So,When financial fraud was exposed, Ruixing began to save herself.。

In April, Lucky's marketing team launched a new marketing strategy:Fine operation + private community. At the same time, the strategic direction has also changed from customer acquisition to retention and repurchase. It can be said that the counterfeiting incident is a turning point for Lucky from conquering the world to defending the world.

In terms of fine management, Ruixing optimized its stores."close and turn" individual stores with poor benefits or overlapping customer coverage, while continuing to open new storesRuixing has opened at least 150 new stores across the country in the past three months. JD.com, an online store, opened its own flagship store, and word-of-mouth stores on Alipay were launched in July.

In the past, in order to match the pace of rapid expansion, the fierce style of play and abundant capital let Rui have no time to take care of the cost problem, but now it slows down, but there is a lot of room for operation.

Since June, Ruixing APP's most famous "old with new" promotion has disappeared. Instead, there are six coupons worth 100 yuan. These coupons can only be used to buy drinks in the form of deductions.The intensity of investing resources in exchange for traffic has dropped significantly.。

As for the so-called private community operation, it is actuallyGuide consumers to join the WeChat group of nearby stores through Ruixing APP. The way of drainage is also very simple, to join the group to enjoy a 3. 8% discount, followed by daily coupons, discounted goods. Through the way of limited time and limited quantity, combined with low price discount, to promote the repurchase of users.

Isn't this a typical game of social e-commerce?

LBS (location-based services) + exclusive offers + limited timeWhich constitutes the basic framework of the operation of LUCKN COFFEE DRC community. In theory, this model can reach users with stable high frequency, drive the increase of repurchase, and at the same time, it has high efficiency and low cost relative to the public domain.

Now,LUCKN COFFEE DRC's private domain users have reached more than 1.8 million.Of these, 1.1 million users have joined more than 9100 user welfare groups around stores, and the number of users is increasing at a rate of about 600000 per month.

In terms of products, LUCKN COFFEE DRC's up-to-date speed is not slower than Starbucks Corp, and nearly 50 new products have been launched in 3 months, including many popular styles.

This set of operation, the effect is very obvious. After LUCKN COFFEE DRC's consumer users changed into private domain users and joined the communityThe monthly consumption frequency increased by 30%, the number of weekly repurchases increased by 28%, and the number of monthly active users increased by about 10%.. For a single store, it is equivalent to an average increase of 8-10 cups a day for each store.

Although more than 300 college stores have not opened because of the epidemic, the cup volume of Ruixing's now open stores has basically returned to the level of December last year. At that time, LUCKN COFFEE DRC was still at the peak of the new consumer market.

Fortunately, Lucky's brand effect is still there.

Summary

After losing the blessing of capital, there is no doubt that Lucky's life is very difficult, but there is not no way out.

Relying on the large amount of money spent in the early stage, Ruixing has gone through the most difficult time in the start-up period, and now has a certain degree of brand influence.

Most of LUCKN COFFEE DRC's stores are located in the lobbies or the first floor of business offices and shopping malls. PlusMore than 5300 stores and 60 million active usersAs long as Ruixing does not blindly pursue growth, it is not difficult for Ruixing to make a stable profit.

Taking advantage of this storm, Lucky entered a cooling-off period and there was so much she could do after extricating herself from her previous frenzied expansion.

Therefore, Credit Suisse did not collapse after the hundred-day storm.

At least for now, it seems that Lucky's "hematopoietic" ability will become stronger and stronger as the subsidy weakens while coffee sales rise.

Capital markets have memories, and financial fraud is hard to get by, but consumers are different, at least when they want to drink coffee, they will not give up this cheap and convenient choice.

The story of Chinese coffee is not over yet. Of course, as long as the finance is not faked this time.