Luckin Coffee mainly relies on launching new products, creating popular products, and refining private domain operations to fully revive.

From setting the world's fastest IPO record to being exposed for financial fraud, stock prices plummeting, suspension and delisting, and closing a large number of stores, Luckin went from being in the limelight to falling into bankruptcy, and its reputation fell to the bottom.

On December 17, 2020, Luckin announced that it had reached a settlement with the U.S. Securities and Exchange Commission and agreed to pay a fee of US$180 million, equivalent to approximately RMB 1.2 billion. This is known as the highest fine in the history of the United States!

However, in just one and a half years, Ruixing was “resurrected”.

Luckin’s latest financial report data shows that Luckin is still losing money throughout 2021, but the losses are narrowing.

Net income in 2021 was 7.965 billion yuan, a year-on-year increase of 97.5%, almost doubling.

More importantly, as of the end of 2021, Luckin Coffee has a total of 6,024 stores, surpassing Starbucks' 5,557 stores in China.

At the same time, Starbucks store sales in China fell by 14% year-on-year, and the unit price fell by 9%, ultimately leading to a 6-point decline in transaction volume.

So, how did Ruixing come back to life?

Let’s go back to the most classic 4P marketing theory and see what changes Luckin has made?

1. Product: Return to product as the core, use popular products to support reputation. We often say: product is 1, marketing is 0. Only by making high-quality products can marketing be infinitely amplified.

Products are the foundation and pillar of an enterprise, and the bridge between enterprises and users is also a product.

In the past three years, Luckin Coffee has returned to products as its core, using hot products to bolster its reputation.

a. Create coffee with “no cognitive threshold”. Compared with milk tea, coffee has a bitter and sour taste. Except for front-line consumers who have been fully educated, most Chinese consumers are not generally very accepting of coffee.

, how to mobilize consumers' subconsciousness, remove the impression of bitter coffee in consumers' minds, and make young people more willing to try it.

Luckin uses flavors that are familiar to mass consumers to "guide" coffee, taps into local food culture the flavors that mass consumers love, and lowers the threshold for trying coffee.

For example, choose "thick milk", "raw coconut" and "red velvet". These products have become popular among mass consumers and have a certain foundation.

Catering is an adventure, and no one knows whether something that has never been tasted tastes good, but products with a certain foundation are more likely to win favor, which also improves public acceptance and increases the probability of the product being a hot seller.

b. Form a hot product matrix and expand a single hot product into a hot product series. Make a list of Luckin's hot product series, and you will find that it is simply a "product multiplication table" raw coconut × latte series, resulting in raw coconut latte.

Raw coconut × SOE series, Yunnan·raw coconut latte and Yerga·raw coconut latte.

Raw coconut × Reina ice series, come to coconut OK Reina ice.

Raw coconut × meteorite, we get the meteorite raw coconut latte.

Thick Milk × Meteorite, resulting in Meteorite Thick Milk Latte.

Meteor × Reina Ice, resulting in Meteorite Latte Reina Ice.

This is an efficient product strategy: find new raw materials, find classic product series, continue to cross-combine, come up with different hot products, continuously deepen your understanding, and form your own hot product matrix.

c. High-frequency new product launch: The highly iterative and systematic new product research and development mechanism promotes new products through rapid iteration and uses big data to find stable hot-selling products.

Luckin went crazy with new products in 2021, launching 113 new products in one year. Through new product testing, it obtained word-of-mouth feedback data from consumers, digitized raw materials and flavors, and then tracked popular trends to continuously iterate new hot products.

At the same time, Luckin's products are no longer limited to coffee, but also include milk tea, light snacks, etc., and it also conducts testing and iteration through rapid introduction of new products.

2. Price: Increase pricing to ensure profit margins. With product reputation guaranteed, Ruixing is also constantly increasing product pricing. The unit price in shopping mall stores has been increased by 2-4 yuan, and in ordinary stores it has been increased by 1 yuan.

While raising the price, it also canceled the previous practice of spreading coupons. Overall, Luckin's actual selling price has increased a lot compared with before, which also ensured the brand's profit margin.

3. Channels: Cost and efficiency are the priority. Luckin’s business model has always been criticized. In 2018, some people questioned Luckin Coffee’s model. In order to catch up with Starbucks, it expanded its stores near Starbucks at high prices, resulting in its own costs.

Very high.

No matter how well the coffee story is told, in the end the physical store must return to its essence, which is cost and efficiency.