Luckin Coffee accurately “bets” on “Black Myth”: The master of joint ventures is frequently “scolded on hot searches”?

Luckin Coffee successfully attracted a lot of attention through its joint products with the popular game Black Myth: Wukong. This strategy not only activated brand traffic, but also boosted sales of related products. However, this joint activity also caused some controversy, such as the shortage of peripheral products and system problems. This article analyzes Luckin's marketing methods such as joint brands and celebrity endorsements, trying to expand business growth points and enhance brand influence.

As a milestone in China's gaming industry, the "Black Myth Effect" continues to spill over.

According to SteamDB data last night, the number of concurrent online players of Black Myth: Wukong has exceeded 2.2 million, surpassing the game Fantasy Beast Palu released in January this year, and ranking second in the history of online players of all Steam games. This game not only activated the enthusiasm of large companies to invest in stand-alone games, but also brought fire to a series of related industries such as consoles, controllers, co-branded products, and Shanxi ancient architecture and cultural tourism.

Luckin Coffee, which successfully caught this wave of overwhelming traffic, is one of the beneficiaries of the IP effect. On August 19, Luckin Coffee and "Black Myth: Wukong" launched the "Black Myth Tengyun American Coffee", a joint product, and supported the purchase of designated packages, and limited 3D limited poster grating cards, 3 joint cup sleeves and other peripherals. Luckin Chief Growth Officer (CGO) Yang Fei lamented in the circle of friends: "The surroundings across the country were sold out in seconds, and the system almost collapsed. The male purchasing power overturned the team's cognition this morning." "More reliable than 10 Father's Days." On August 19, local time, Luckin Coffee's US stocks rose by more than 7%.

It is not surprising that Luckin Coffee has seen a hit collaboration again. After all, this fast-moving coffee chain has been making headlines for years with its “fancy marketing methods”. The previous collaboration with “The Story of Rose” and the signing of Liu Yifei also caused heated discussions. But this “Wukong collaboration” also made Luckin Coffee “scolded on the hot search”. How can this collaboration, which is both worrying and joyful, avoid a setback?

1. Luckin Coffee’s precise bet on “Black Myth”: The self-cultivation of the joint master

"You're after two cups of coffee? Of course it's the peripherals."

On August 19, the day the game co-branded package was launched, many fans complained: the "poster package" was sold out in the morning, and 400,000 co-branded grating cards were quickly snapped up. Related topics such as "coupons cannot be redeemed" became hot searches on social platforms, and netizens said, "I bought the package and they told me that there is no way to get the peripherals", "Wukong didn't get it, but I was fooled first". In addition, CGO's praise of "male purchasing power" also triggered complaints from some female consumers.

Later, Luckin explained that there was a problem with the package system and it has been fixed. On the afternoon of August 19, Luckin apologized on Weibo, saying that consumer enthusiasm far exceeded the team's expectations and that a replenishment plan had been quickly formulated. Due to the high production requirements of the peripherals, it is estimated that it will take 15 days, and everyone will be notified immediately after the new batch arrives in the store. On the second-hand trading platform, this "3D effect visible to the naked eye" co-branded 3D limited poster grating card was sold for up to 200 yuan+.

Although it is a mixture of black and red, this collaboration can be regarded as a collaboration with extremely high traffic and popularity, almost comparable to the "Moutai co-branded sauce-flavored latte" that was previously popular.

The reason for this may be that as the first 3A masterpiece in China, "Black Myth: Wukong" has received unprecedented attention from the entire network. The game's cultural IP and oriental aesthetics have a strong sense of "national trend", and behind it are strong emotional resonances such as "national pride" and patriotism. This global cultural export is of great significance, and the official media's praise also fully illustrates this point.

Although many brands such as NVIDIA, Baidu Maps, Feizhi, Jikos Industrial, Didi Qingju, and Zhitai have collaborated with it, fast-moving consumer coffee with a low consumption threshold is closely related to the daily life of urban white-collar workers and appears frequently. It is very suitable as an "entry-level model" of co-branded products, and it is also a "social asset" that triggers fission-like discussions on social platforms. The "national trend linkage" also has a story to tell. Therefore, Luckin Coffee, which successfully crossed the border, became the first brand to take advantage of the popularity of "Monkey Brother".

Luckin Coffee launched the co-branded package one day before the game was released, and the popularity continued to ferment the next day, and it also had an advantage in terms of public attention. According to Luckin Coffee’s senior management, the team paid attention to "Black Myth: Wukong" very early. As early as three or four months before this joint cooperation, Luckin Coffee had already begun to communicate with "Game Science" about cooperation. "The (Game Science) team also made KA (cards) specifically for Luckin Coffee."

According to incomplete statistics, as of August 19, Luckin Coffee has collaborated with 18 brands this year, including "Rose Story", animation LABUBU, Sesame Street, Beast Party, Loopy, etc. Not every collaboration can achieve miraculous results, and some collaborations are not well received.

After each joint marketing campaign, there is a high marketing cost. The marketing activities and the 9.9 yuan price war have brought rapid revenue growth, but also brought cost burden and a decline in profit margins.

Luckin Coffee's second quarter financial report shows that the company achieved a total net income of 8.403 billion yuan, a year-on-year increase of 35.5%, setting a new quarterly revenue record; net profit was 871 million yuan, a year-on-year decrease of 12.8%. In the first half of the year, Luckin Coffee achieved a total net income of 14.681 billion yuan, a year-on-year increase of 38%; net profit was 788 million yuan, a year-on-year decrease of 49.6%.

In the second quarter of this year, sales and marketing expenses reached 433 million yuan, an increase of 42.5% over the previous year. In addition, Luckin's sales expenses from 2021 to 2023 will be 336.9 million yuan, 570.1 million yuan, and 1.2865 billion yuan, respectively, showing an increasing trend year by year.

Looking at the entire beverage industry, beverage brands are increasingly keen on co-branding with game IPs. Considering the overlap of audience groups, otome games are the first to bear the brunt. From the "Four Major National Otome Games" to Papergames' new "Love and Deep Space" this year, there are many cases of co-branding. "Luckin Coffee x Black Myth" proves that single-console games dominated by male players may also stimulate consumer purchasing desire, and the "he economy" may explode in specific scenarios and nodes.

Players are enthusiastic about "eating grain", and their requirements for the quality of peripherals, supply quantity, operation, etc. are getting higher and higher. These will become the test of the next IP joint gameplay, and if you are not careful, it may also become a failure point.

2. Sign Liu Yifei, will “morning coffee and afternoon tea” work?

The Olympic season has just passed, and Luckin Coffee, the "model worker in the marketing industry", has once again returned to the hot search list.

During the hot drama "Rose Story" starring Liu Yifei, Luckin Coffee co-branded the yellow rose latte with the TV series, and the new product was sold out in many stores. On August 5, the new product Qingqing Jasmine Light Milk Tea was launched, specially selected before the beginning of autumn, the "first cup of milk tea in autumn" hot spot. On August 11, Luckin Coffee officially announced that the starring Liu Yifei was the global brand spokesperson and chief recommendation officer of tea drinks. The number of reposts, comments and likes on the official Weibo account set a new record in the recent history of Luckin Coffee's account.

Later, Luckin Coffee entered the new tea beverage market with its "low-price killer weapon of 9.9 yuan". On August 12, Yang Fei, co-founder and chief growth officer of Luckin Coffee, announced on social media that the first-week sales of Qingqing Jasmine exceeded 11 million cups, becoming the best first-week sales of new products this year. On the same day, Luckin Coffee also launched the "Morning Coffee and Afternoon Tea - Give You 100 Million Cups of 9.9 Yuan Afternoon Tea" event.

However, this originally win-win cooperation has encountered a backlash. Previously, the customer service staff mistakenly wrote the "Qian" in the name of the brand spokesperson Yi Yang Qianxi as "Gan", which caused strong dissatisfaction among his fans. On August 11, the official blog issued an apology letter to apologize to Yi Yang Qianxi and the public. Shortly after the apology, the company announced the addition of a new spokesperson, which further aroused the dissatisfaction of fans.

Putting aside the voices of the fan circle, it is not difficult to see that Luckin's strategy for selecting celebrity spokespersons always keeps up with the overall trend, and has a certain degree of sensitivity and foresight, helping the brand to open up the market at different stages of development.

From inviting "movie stars" Zhang Zhen and Tang Wei to endorse its products in the early stage of its establishment in 2018 to establish a high-end texture perception, to inviting "fresh meat" Liu Haoran to endorse its tea sub-brand "Xiao Lu Tea" the following year, and then signing top star Xiao Zhan. Before the Winter Olympics, it bet on Gu Ailing and created a series of activities around her, and successfully promoted iced coffee with the help of the peak influence of sports stars winning championships, reaping the dividends of the "ice and snow economy", and gradually washing away the stained memory of "financial fraud". Among the brands that signed Gu Ailing, Luckin became the one that "maximized the value of the spokesperson".

After that, Lang Lang, Yi Yang Qianxi, and even Tan Jianci signed contracts, taking into account top stars and different circles. Then there is Liu Yifei, who has always been a "national goddess" and has many high-end endorsements. Luckin Coffee is trying to attack the female "afternoon tea" market, create a full-time consumption scene, expand business growth points, and take into account both quality and traffic.

Although the independent tea brand Xiaolu Tea gradually faded out of the market due to the Luckin Coffee scandal, its exploration of non-coffee beverages has never stopped. In June this year, Luckin Coffee also launched a lemon tea series, including light coffee lemon tea, classic lemon tea and matcha lemon tea. It is said that sales exceeded 37 million cups in two months after its launch. Based on the ingredients and taste, Qingqing Jasmine Light Milk Tea is regarded as a "substitute version of Boya Juexian", aiming at Farewell My Concubine, focusing on the concept of health, and the packaging is also biased towards the Chinese style.

In order to enrich the product structure, compete for incremental market, revitalize the non-peak consumption hours of coffee in stores, and increase the output of single stores, it is imperative for Luckin to create a "tea + coffee" dual-wheel drive.

With the popularity of "light milk tea", new tea beverage brands and fast-moving coffee brands have a certain degree of overlap in many aspects such as main market, taste, and function, and their price positioning is also relatively similar.

The former is usually associated with popular concepts such as new Chinese style and national trend. Tea culture has a large room for expansion, and compared with the deeply rooted coffee culture in the West, the habit and frequency of drinking coffee in China are still inferior.

Luckin Coffee's "broadening of boundaries" is related to fierce market competition. Kudi, which is highly similar to Luckin Coffee's DNA and was organized by Lu Zhengyao, the former founder who was "driven away", once involved all its peers in the "9.9 yuan price war". This year, the low-price war has entered the second half. Kudi Coffee chose to continue the "9.9 yuan for the whole store" activity, and Lucky Coffee under Mixue Ice City is known as "6.6 yuan capped". Starbucks, which is relatively high-priced, has also had to achieve lower prices through platform subsidies and coupon distribution since this year. Luckin Coffee has adjusted and reduced the scope of the "9.9 yuan" activity, activity stores, and applicable drinks to reduce cost pressure.

But the track that Luckin Coffee has entered is not easy to do. In the field of new tea drinks, "price reduction and low price" may become a long-term trend. The "2024 China New Tea Drinks Hot Product Trend Research and Analysis Report" pointed out that 80% of consumers choose tea drinks below 15 yuan, and less than 4% buy tea drinks above 20 yuan. In addition, it is also a red ocean market. Nayuki's Tea's announcement showed that the revenue in the first half of 2024 is expected to be about 2.4 billion to 2.7 billion yuan, and the net profit loss is 420 million to 490 million yuan. Cha Baidao expects a net profit of about 220 million to 250 million yuan in the first half of 2024, a year-on-year decrease of more than 63.03%.

In many office buildings, users are developing the habit of "Breakfast C Noon T" (a cup of coffee in the morning and a cup of tea in the afternoon), but it will take time to verify whether Luckin's new layout can be successful. A screen-sweeping collaboration, a big celebrity spokesperson, and a successful new product are not enough.

Author | Mia
Editor | Sugar-fried Hawthorn This article is by the author of Operation Party [Entertainment Unicorn], WeChat public account: [Entertainment Unicorn], original/authorized to be published in Operation Party, and any reproduction without permission is prohibited.

The title image is from Unsplash, based on the CC0 protocol.