Reality is always more imaginative than imagination.
Luckin Coffee has set a record for the shortest listing - it only took one year from the time the Nasdaq bell rang on May 17, 2019, to the announcement of the suspension.
The most glaring comparison is market capitalization. June 26 was Luckin’s last trading day. After triggering six circuit breakers, the market value was fixed at US$349 million. Compared with the peak of US$58.3 billion, it shrunk 167 times, which is embarrassing.
From a prosperous listed company to a delisted company, Luckin Coffee has taught the entire capital market a lesson.
The impetuous business ecosystem has created the proud son of heaven, Ruixing.
First of all, it is an overconfident entrepreneurial team.
The main founding team of Luckin Coffee, Lu Zhengyao, Qian Zhiya, Yang Fei and others all came from China Car Rental, and there is no word related to coffee in their past.
However, they are full of energy and firmly believe that crossing borders is not difficult. With their business talents, they can turn this game into a success.
Secondly, it is constantly burning money.
In 2018, Luckin was born and opened more than 2,000 stores. As of January 2020, Luckin Coffee has spread across 44 cities across the country, with more than 4,500 stores. After all, more than 100 stores are opened every month.
You must know that Starbucks has only been in China for more than 20 years and has only more than 3,600 stores. Luckin’s astonishing speed puts even industry leaders to shame.
Luckin’s massive subsidies are still legendary. New users get their first cup for free, and old users can get coupons every day, and can enjoy a cup of hot coffee for an average of 10 yuan.
Furthermore, it is a crazy screen bombing.
By signing two celebrities, Tang Wei and Zhang Zhen, Luckin Coffee launched advertisements in elevators and movie theaters before and after the Spring Festival, making the blue color flood the public’s attention.
There is also an excessively rapid pace of expansion.
In July 2018, it completed a US$200 million Series A financing, with a valuation of US$1 billion;
In December 2018, it completed a US$200 million Series B financing, with a valuation of US$2.2 billion. US dollars;
In April 2019, it completed the B+ round of financing of US$150 million, with a valuation of US$2.9 billion;
On May 17, 2019, the IPO was listed...
Luckin did not give the capital market a chance to breathe at all, and went on to kill all directions with great vigor. There is no word "deep cultivation and careful cultivation" in its dictionary. Everyone was immersed in the dream of bringing benefits, raising their heads high, with ecstasy in their eyes.
As for the taste of Luckin Coffee? Does it bring value to society? Not that everyone is most concerned about it.
When a company only burns money to tell stories, focuses on the transformation of business models, excessively worships the power of capital, and ignores the essence of products and technological innovation, it must be glitz that will not go far.
There is too much evidence in this regard.
Do you still remember the popular unmanned retail store?
Starting in 2017, unmanned retail companies have been crazily spreading across the country. Unmanned convenience stores are spread all over the community, and unmanned shelves appear in the corner of every office building. The total investment volume in the entire market in the past two years reached 46 billion yuan.
However, it turns out that these convenience stores and shelves not only occupy public resources, but also cause an alarming waste rate. Its only purpose is to test human nature - no one can guarantee not to take an extra bag of potato chips without supervision.
Soon, such a business model that ignored common sense proved undesirable. Leading players have laid off employees, gone bankrupt, and become abandoned by capital.
It only took less than two years for it to go from popularity to sudden failure.
Do entrepreneurs and capital really not realize how dangerous this model is? Most of them just want to be large-scale, hype up the trend, and reap the benefits.
Do you remember the e-cigarettes that were once so popular?
At its peak, countless entrepreneurs flocked to it.
In just three months of 2019, there were as many as 248 new companies in the domestic e-cigarette industry. Last year, the publicly disclosed financing amount of the e-cigarette industry reached 1.511 billion yuan.
Luo Yonghao once entered the market with a high profile with Ono e-cigarettes and received 30 million in financing.
However, e-cigarettes are not so much an emerging consumer product as they are a new opportunity to get rich.
The entry barrier for e-cigarettes is very low. Most entrepreneurs only need to spend hundreds of thousands of yuan to find a foundry in Shenzhen to produce e-cigarettes and then sell them under a brand name.
A set of products sells for 300 yuan, and the purchase price is about 150 yuan. As for e-liquid and cartridges, if they sell for 100 yuan, the purchase price will be around 40 yuan. Gross profit is between 50% and 70%.
You don’t need to master any core technology to still earn a lot of money. This is the calculation of e-cigarette players.
However, their spring and autumn dreams soon shattered.
In November last year, the State Administration for Market Regulation and the State Tobacco Monopoly Administration jointly issued the "Notice on Further Protecting Minors from E-cigarettes", requiring e-cigarette production and sales companies or individuals not to sell online products. Selling electronic cigarettes.
Suddenly everyone was silent. Entrepreneurs can run away and retreat. In the first half of this year, as many as 197 e-cigarette companies were liquidated, revoked, or canceled.
The bubble phantom of the e-cigarette finally dissipated. In this, we can't see any down-to-earth or passionate enthusiasm, but only the false prosperity of drumming and spreading flowers.
Since when did China’s capital market change?
Most people no longer believe in getting rich through hard work, but instead want to take shortcuts to get rich.
Looking at their actions and words, we can find two similarities:
First, they like to link their companies with cutting-edge technological concepts, such as artificial intelligence and big data. Data, Internet of Things. Even if they can't succeed, they will try their best to package the business with concepts, and supplement it with various data and patents to frighten the layman.
Second, I like to talk about feelings and tell stories. Although the intention is to make money, of course they don't say it out loud. Instead, he will describe one vivid and detailed story after another, such as a counterattack after bankruptcy, an encounter with Bole in a coffee shop... Inspiration is the constant password. When it comes to prospects, they will talk about social prospects, the future of the people, and mainstream values. Benefiting the people is their unchanging original intention.
There are many tricks to this method, and the leeks are harvested one after another.
But the tide will eventually recede, and it will be clear who is swimming naked. Any operation that is not in line with business common sense will eventually be seen through.
In fact, a good business has three characteristics:
First, the product is strongly needed by many people, is difficult to replace, can increase prices, and has economic franchise;
< p> The second is that there is a large space for growth, and it is easy to copy and expand, so that the marginal cost does not increase or decrease;The third is that it is difficult for others to copy and imitate.
Any business model that does not meet the above characteristics may need to be carefully considered. In the turbulent business world, returning to the original intention of business is the most important thing.
If you don’t remember Luckin’s lessons, the delisted Luckin will definitely not be the last one to leave.
Author: Xiao Xiaogao