Beijing Business Daily
Netizen: "Ruixing over 9.9 has no soul." "I drink it without 9.9. Who wants Ruixing to be my life sustaining coffee?".
In the early morning of May 2, # Ruixing's 9.9 yuan event was shrunk again # and rushed to hot search. It is reported that Ruixing Coffee released its quarterly report on the evening of April 30. The first quarter report showed that Ruixing Coffee's revenue was 6.278 billion yuan, up 41.5% year on year; The net loss was 71.42 million yuan, and the net profit in the same period last year was 564 million yuan.
During this period, the 9.9 yuan activity of Ruixing Coffee gradually shrank, causing concern. In February of this year, the topic of "Ruixing's 9.9 yuan/cup activity has shrunk" was on the hot search. In the first working week after the Spring Festival, many migrant workers found that the original "9.9 yuan" coffee on the home page of the menu was missing when they opened the Ruixing applet, while a section of "9.9 yuan coffee stamps my weekly receipt" appeared in the lower part of the home page. After clicking in, customer service needs to be added to get the coupons, and the coffee categories applicable to 9.9 yuan coupons are also reduced compared with the previous ones.
According to the Red Star Capital Bureau, at present, there are only five products left in the 9.9 section of the Ruixing applet. The raw coconut latte, velvet latte, concentrated American style and other options have been canceled, and the orange C iced tea and pomelo C iced tea without coffee have been added.
In addition to narrowing the range of options, many users on social media said that Ruixing's 9.9 yuan coupon was not available in some stores. Red Star Capital Bureau opened the Ruixing applet and found that some stores in Chengdu, Sichuan, could not use the 9.9 yuan store anniversary coupon.
Under the relevant topic, a netizen commented that "Ruixing who has more than 9.9 has no soul". Others said, "I would drink it without 9.9. Who wants Ruixing to be my life sustaining coffee?".
In the first quarter, the revenue increased but turned from profit to loss, because the number of stores increased but the revenue of individual stores decreased, and the cost increased.
According to the quarterly report, Ruixing had a net increase of 2342 stores during the period, with a total number of 18590 stores. However, the same store sales of self operated stores decreased by 20.3% during the period, compared with a year-on-year growth of 29.6%.
Due to business expansion, including the opening of new stores and strategic investment in brand and promotion activities, the total operating expenses of Ruixing increased by 68.8% year on year. At the same time, the percentage of operating expenses in net income increased from 84.7% in the same period of 2023 to 101% in the first quarter of 2024. This is because the average selling price of the company's products decreased, resulting in an increase in the percentage of store rental costs, labor costs and material costs in net income.
In response to this, Guo Jingyi, chairman and CEO of Ruixing Coffee, said at the performance meeting that in addition to the impact of objective factors, the first quarter profit decline was also the result of active adjustment. He explained that in the face of fierce competition in China's coffee industry, he took market share as the core goal of development and adjusted the pace of opening stores.
Guo Jinyi also said that he would continue to pay attention to business growth and market share, and there was no clear timetable for returning to the main board of US stocks.
It is worth noting that according to the reference information, Ruixing Coffee has replaced Starbucks as the "Coffee Brother" in the Chinese market, and its total sales in the Chinese market in 2023 has surpassed Starbucks. The sales of Ruixing Coffee increased significantly and surpassed that of Starbucks, mainly because of fast store exhibition, low price strategy and innovative marketing.
In March this year, Howard Schultz, the founder and honorary chairman of the Board of Directors of Starbucks, visited China. During the event, he talked about his views on the Chinese market and fierce competition. Schultz revealed that competition is making millions of people know coffee. But the company is not engaged in a discount war or price war. What Starbucks needs to do is to create a humanistic connection with high-quality coffee based on the community and form an "experiential coffee brand".
However, as soon as his words fell, "the wind of 9 yuan and 9 yuan finally rolled to Starbucks" was on the topic of hot search. Coupons such as "15 yuan less than 70 yuan", "55.9 yuan for three cups" and "45.9 yuan for two cups" have also appeared.
In this regard, Wang Jingying, chairman and CEO of Starbucks China, explained that the main reason for the reduction of the per customer price was the personalized promotional activities launched by Starbucks China to increase the frequency of consumers' purchases. "This enables us to optimize sales and profits." This means that "trading price for volume" has gradually become the reality of Starbucks in the Chinese market.
Editor | Wang Naixin Comprehensive Red Star News, Upstream News, Daily Economic News, Reference News, Previous Reports, etc
Picture | Screenshots of Beijing Business Daily, Ruixing applet, Sina Weibo
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