As the traffic king this year, do you understand the strategic logic behind Luckin's co-branded marketing? Let's read this article together and take a look at Luckin's co-branded marketing!

Since the joint venture between Luckin Coffee and Moutai exploded the market on September 4, Growth Black Box has been tracking and studying the logic and growth strategy behind it. Although there are many interesting discoveries, we have been busy with other businesses and procrastination has come back. Luckin Coffee’s Q3 financial report has been released, but we have not yet sent out the research report.

Not long ago, when I was having an academic exchange with Professor Wang Qi of CEIBS, we accidentally talked about the topic of co-branded marketing. She told me a fact that surprised me: co-branded marketing is so popular in the Chinese market, but when CEIBS professors were doing marketing-related research, they found that there were no research results on co-branded marketing strategies on the market. On the other hand, CEIBS entrepreneurs are very interested in the success of Luckin's co-branded marketing and hope to get reference and inspiration from it.

It has to be said that we have not seen anyone deeply dissect Luckin’s co-branded marketing strategy. Professor Wang Qi also raised four “soul-searching questions” to help us better sort out our thoughts:

1. What business logic does Luckin Coffee’s co-branded marketing strategy follow?
2. Why does Luckin Coffee continue to collaborate with other brands? What benefits does this bring to itself and other brands?
3. Why did the joint venture between Luckin Coffee and Moutai achieve such a huge impact? What are the strategic highlights?
4. What can we learn from this?

Seeing the imbalance between supply and demand in the market perception, we were instantly motivated to write a report! So, after analyzing a large amount of social media data and communicating with many brand experts, we tried to restore the operating logic of Luckin's co-branded marketing from a third-party perspective, and combined with the latest Moutai sauce-flavored latte case, answer the above key questions for reference by corporate decision makers.

Summary of key points:

• Luckin’s traditional marketing strategy is heavy cavalry, dominating the marketing budget; while the joint marketing led by the BD team is special forces, achieving high returns at low costs.
• Luckin Coffee has never used co-branding as its main marketing line, but has instead used the "growth flywheel" based on the traffic pool to allow co-branded marketing to fully leverage the compound interest of brand assets.
• There are many joint collaborations with bank channels, which have certain earning capabilities and vertical monopoly effects.
• Luckin Coffee has two ways to achieve joint marketing: one led by the marketing department and the other led by the product department. However, the product-led approach has higher returns and is the focus in the future.
• Thanks to its leading content creativity capabilities, Luckin Coffee successfully leveraged social communication in the omni-channel marketing of its sauce-flavored latte.
• Luckin Coffee has carefully built a digital marketing chain for its sauce-flavored latte, with a clear coordination rhythm on Douyin, Weibo, Xiaohongshu, and private domains.

1. Special Forces Behind the Heavy Cavalry

The question that everyone is most concerned about is: What exactly is Luckin Coffee’s co-branding marketing all about? Why does it keep doing co-branding?

Let's analyze the above two conclusions in detail:

1. The birth of Luckin's co-branded marketing strategy did not involve any brilliant decision-making or a tortuous and inspiring story. Instead, it was the successful experience and path accumulated by the core team since the Shenzhou UCAR era.
2. For Luckin, the joint marketing strategy is not a secret weapon. It is just one of the execution strategies under the entire marketing strategy. In other words, even if Luckin does not do a joint marketing, it will not have much impact on growth. The reason why it continues to do it is because the benefits are greater than the costs, and there is a chance to create a hit product like Moutai.

In order to explore the past and present of Luckin’s co-branded marketing, let’s focus our attention on a key figure: Luckin’s growth “commander-in-chief”, current Chief Growth Officer (CGO) Yang Fei.

You may have heard that Yang Fei wrote a book called "Traffic Pool" as early as 2018, which can be called a "textbook" of Internet marketing. At that time, he was still the CMO of UCAR Group. The book combines his own practical experience and puts forward a very sharp point of view: the once popular "traffic thinking" is essentially a single-threaded acquisition of traffic and then monetization. With the decline of traffic dividends, it can no longer solve the traffic dilemma of enterprises. The "traffic pool thinking" is to obtain traffic and obtain more traffic through storage, operation and discovery, thus forming a cycle and achieving long-term growth.

Although Luckin's growth strategy is constantly innovating and evolving, we find that the underlying logic of the "traffic pool" is almost the same as it is today. The "Traffic Pool" has a total of 12 chapters, one of which is dedicated to "the clever use of traffic in cross-border marketing", which is the so-called joint marketing.

Yang Fei mentioned in the book that since 2015, Shenzhou Special Car has been investing heavily in "traffic mutual washing" and has carried out many joint marketing activities with major Internet apps and consumer brands. As of 2018, it has exceeded 500 brands and has generated a lot of secondary cooperation!

He described the BD department responsible for joint marketing as follows: "If brands, advertising, and social media are the heavy cavalry in the marketing army, then BD is a special forces unit that appears and disappears mysteriously, often creating magical effects at a relatively low cost."

The real name of the “marketing campaign” often mentioned in the industry should be “marketing campaign” – using the arms to describe the division of labor is quite vivid. And we found that this is completely in line with Luckin’s current positioning of joint marketing :

For heavy cavalry such as brand marketing and digital operations, a large amount of budget investment is needed to maintain, so as to continuously increase the growth limit and win the small with the big. Luckin has dozens of people in the brand marketing department alone, and more than 100 people if the digital marketing department that manages the private domain is included. Its marketing expenses are considered to be the top in the coffee and tea industry. In the second quarter of 2023, sales and marketing expenses reached 303.6 million, an increase of 135% from 129 million in the same period of 2022, and the rate exceeded 4.8%.

For the special forces of joint marketing, their budget is negligible, but they are looking for opportunities to break through the growth ceiling and win big with a small investment. Luckin's team responsible for BD only has a few people. So although "Traffic Pool" has 12 chapters, joint marketing strategy only occupies one chapter, while digital advertising and fission marketing occupy 6 chapters.

This shows that co-branding is just one of the N marketing strategies that Luckin Coffee "conveniently" implements, and not its main marketing line.

Luckin Coffee conducts 50-60 joint marketing activities every year, almost one every week, which seems to be an astonishing total. However, according to CBNDATA's research, Luckin Coffee's most common type of cooperation is endorsements by non-top-tier celebrities (such as sports stars), followed by banks and other platforms that have opened up membership systems (such as co-branded bank cards).

The real phenomenal hits still rely on commercial IP (such as Tom and Jerry) and cooperation with other brands (such as Moutai), but it should be noted that the number of these two types of cooperation is actually very small, and only brand cooperation can achieve integration at the product level .

Based on the Douyin data of Cicada Cube and the Xiaohongshu data of Cicada Xiaohong, we can roughly estimate that the relevant social media content of the annual joint marketing activities contributes less than 10% to Luckin's online voice (excluding the Moutai joint example in September).

By analyzing the daily content of Luckin’s private WeChat account, we can also find that the proportion of content related to co-branding is very low. Promotions and new products are the mainstream. Even the corporate WeChat account does not push Moutai’s co-branding activities 1V1, but still maintains the coupon mode. In addition, a large amount of advertising flow, always-on brand seeding, event marketing, etc. are also unrelated to co-branding - Luckin has its own distinctive brand image, and co-branding is nice to have.

Taking Luckin’s brand exposure on Douyin as an example, we can also find that: under normal circumstances, the number of active users of Luckin’s mini program is not very correlated with the success of the joint venture. The one that really has an impact is the case of Moutai.

Luckin has many joint ventures every month, but the brand exposure will not be greatly affected because these joint ventures are slightly better or worse. User growth is not driven by stacking joint ventures. Its overall marketing strategy is still centered around major promotion nodes and new product launch cycles. The heavy cavalry are the ones who spend big money and make great efforts.

As for why Luckin Coffee keeps doing joint ventures, we believe its logic is also based on the "Traffic Pool":

• Brand breaking the circle: "mutual traffic washing" with other brands to penetrate into more people.
• Stimulate more content creativity and enrich brand connotation: A brand cannot tell so many stories on its own, nor can it support a large amount of content production. It needs to rely on external cooperation to generate more marketing ideas, fill its own content system, and thus strengthen communication with users.
• Reduce new user acquisition and conversion costs: directly reduce the cost of new user registration and app downloads, while driving product sales
• Low risk: The operating cost of the BD department is extremely low. At the same time, most of the time, it does not look for top streamers and has never encountered a crisis of collapse. Brand building is not tied to joint ventures, and not doing joint ventures will not affect growth.

2. The operating logic of joint marketing

There are actually quite a few "co-branding maniacs" in the food and beverage industry, and their performance is not bad. Is Luckin's co-branding marketing operation logic different from that of other companies? Let's first look at Luckin's two paths to co-branding marketing.

（1）Product-driven marketing department

The internal R&D department has already made clear plans for new product SKUs, and then promoted the marketing department to jointly plan new products with more explosive points, and the joint marketing activities were introduced naturally. Because product development is the most difficult part, the whole process will be smoother if it is promoted as the center, and this will also become the focus of Luckin Coffee's future joint ventures.

For the BD team, they will be more proactive in contacting potential brand partners to promote the launch of new co-branded products. But whether there is a suitable co-branded product or not, the new product must be launched online, and the budget has been planned long ago. The co-branded product is just a bonus.

For example: It is not because of the cooperation with Moutai that the investment has increased. Luckin has already developed a new SKU of alcohol + coffee in advance and is ready to be launched on the market. Then, it is nothing more than whether the alcohol raw material should be Moutai or other liquor. After comprehensive judgment by the marketing department, it was finally decided that this new product should be launched to the market in the form of a co-branded Moutai. Luckin did not develop a SKU specifically because of the desire to cooperate with Moutai, and there was no additional cost due to the intervention of special forces.

(2) Market-driven product division

When the marketing team has new ideas, or external partners come to them with needs, the marketing department can also promote product development to cooperate. For example, in 2019, Amul launched a coffee-flavored yogurt in collaboration with Luckin Coffee. Luckin Coffee passively cooperated with Amul Coffee's needs, developed a special coffee liquid, and also exchanged a lot of marketing resources from Amul Coffee - this has laid the foundation for Luckin Coffee's joint model to a certain extent. However, the marketing department has difficulty controlling the progress of research and development, and the project progress is very slow.

In order to fill the gap in the product launch cycle, the marketing department tries not to touch the product itself and turns to purely marketing-oriented joint activities, such as affixing the partner's logo to sponsor it, launching new packaging, etc. The partner brands also want to wash users out of Luckin's traffic pool through joint ventures.

In this case, all of Luckin's co-branded marketing costs are passed on to the partners, and even the marketing materials and external marketing expenses are paid by the partners - because the partners have already planned the marketing campaign budget, and the money will still be spent even without the co-branding, that is, adding Luckin's VI to the materials before they are released. Then Luckin's BD team is only responsible for project coordination and management, saving manpower costs. Luckin's identity is more like a super-head KOL/media channel, which only provides its own resources for position exchange.

Combined with external comparison, although everyone's joint venture is to ultimately drive product sales, we believe there are three logical differences:

First, other brands do not have "special forces" combat units. Joint marketing is often the main line of marketing strategy, which is directly managed by the "heavy cavalry". Some key marketing campaigns are actually carried out around joint marketing to achieve key business goals.

Everyone attaches great importance to joint ventures, but Luckin Coffee has become the most "lying flat": under the product-driven model, the heavy cavalry must spend money and bear the indicators themselves, and it does not matter whether there are special forces or not; while under the market-driven model, the special forces do not need to spend their own money for combat, and there are basically no assessment indicators.

In contrast, Heytea’s founder, Nie Yunchen, personally organizes co-branded marketing activities, and even negotiates some collaborations himself[5]. The marketing department takes the lead, while operations and product departments are responsible for coordination. The final results will directly evaluate key indicators such as sales, exposure, market penetration, and user activity. For co-branded products, the performance evaluation standards are more stringent than in daily activities. In the six major co-branded activities each year, Heytea’s overall sales will increase by 10-20%.

On the other hand, HEYTEA’s main products usually account for 4% of the sales on the day, while successful co-branded products can directly increase the sales share to 8%. HEYTEA and FENDI’s co-branded marketing has sold 10 million cups and has attracted more than 600,000 new users. The brand exposure of both parties has increased exponentially, and the effect is not inferior to that of the sauce-flavored latte .

Holiland's marketing department is directly led by the "second-generation" boss, who implements the overall joint activities, and many partners also have to personally participate in planning and negotiation. In many joint activities, Holiland can leverage natural traffic and sales conversion at a very low cost, achieve product technology innovation, and almost "spend no money on marketing", and successfully rejuvenate brand assets.

Each company has its own model, and Luckin's joint marketing cannot represent the optimal solution. However, the advantage of splitting the "special forces" is risk isolation and flexibility. If joint marketing is used as the main line of marketing, on the one hand, the main marketing investment is directly tied to the joint marketing, and if it fails, the market and R&D will suffer; on the other hand, the number of top brands is limited, the negotiation cycle is long, and it is full of uncertainty. If the negotiation fails, the next marketing campaign may not be launched.

Second, thanks to the traffic pool accumulated by Luckin through heavy cavalry in the early years, it has stronger bargaining chips, giving special forces more room to play.

Let me quote Yang Fei’s theory from the book “Traffic Pool”: a brand must first establish its own traffic pool, such as App, WeChat, community, and the brand itself, and secondly, use fission marketing (WeChat fission, App fission, product fission), WeChat social marketing, event marketing, cross-border marketing and other operational methods to ensure a steady flow of traffic.

During this process, Luckin’s refined operations in the private domain have continuously increased its profits, allowing it to invest new marketing budgets in marketing activities, which has once again led to growth in the traffic pool. Our research found that Luckin’s early promotional activities seemed to burn money, but:

• Users download the app to get a cup of coffee for free, and the cost is only the variable cost of coffee, which is 2-3 yuan
• After getting the first cup of coffee, users can get a 18% discount coupon by inviting friends, or buy three 18% discount coupons at a very low price. When users start to repurchase the second cup, the amount they pay can cover the variable cost of the first two cups.
• When the user repurchases the third cup, the ROI will be greater than 1

The ever-expanding user base and brand assets have given Luckin a favorable position in cooperation negotiations. For example, Luckin has tens of millions of followers on WeChat and Weibo. If converted to the advertising fee of a top KOL, it would cost hundreds of thousands of yuan, not to mention that Luckin also has a mini program with tens of millions of DAU and 10,000 offline stores across the country.

Even for the top brands, how much budget do they have for a regular campaign? How much traffic resources can they “buy” from Luckin Coffee after anchoring it at the market price? Therefore, the new resources purchased by the partners themselves must be shared with Luckin Coffee, thereby providing equal value – for example, the spokespersons they hire must be used by Luckin Coffee for free, and all exposure points must be hung with Luckin Coffee’s logo. This is why, with the promotion of the marketing department, Luckin Coffee can pass on the cost of the joint venture as “Party A”.

By leveraging the new resources of its partners, Luckin can inject new traffic into its own traffic pool through joint marketing activities. Therefore, with the cooperation of heavy cavalry and special forces, a long-term and sustainable "growth flywheel" has been formed, which is a continuous secondary development of brand assets with a significant compound interest effect. As more and more joint ventures are done, Luckin's own successful cases have also increased, thus forming a word-of-mouth effect in the industry, and cooperation will become easier and easier, and even partners will help Luckin recommend others.

For other brands, since they do not have the advantage of traffic pool, they are at a disadvantage in negotiations and find it difficult to obtain new resources. The entire joint plan will also be unstable and difficult to sustain.

Luckin’s strong position has also affected the product profit margin to a certain extent. Many new brands need to pay the other party’s authorization fee when they co-brand with strong brands, that is, they have to share the profits with the partner for every cup of product sold (usually around 10%), which also includes pure IP commercial authorization. But for Luckin, it does not need to pay this fee. There are even commercial IPs that value Luckin’s traffic resources, and the authorization price is much lower than the market price, and no profit sharing is required for a single buyout.

Third, Luckin’s co-branding has captured a money-making channel that few new brands pay attention to.

We mentioned at the beginning of the article that Luckin has a large number of joint cooperations with "business platforms/members" and the most repeated cooperations - the most core partners are various banks, such as co-branded credit cards, bank APP activity areas, new user registration benefits, etc. This kind of activity is rarely publicized and cannot create a phenomenal hit, but it has brought real benefits to Luckin:

• Directly generate profits: Coupons are benefits given by banks to customers, and Luckin Coffee does not give away products for free. Therefore, banks have to purchase in bulk from Luckin Coffee, usually paying millions of dollars in purchase fees. Although this cannot be compared with Luckin Coffee's overall revenue, it provides a simple and direct cash flow.
• Attract new users to the app at zero cost: If a bank customer receives a coupon, he or she must download the Luckin app or register for the mini program to use it. Regardless of whether the user consumes the coupon in the end, Luckin gets a real user without paying any cost (washed from the bank's traffic pool). Usually, it costs at least 10-20 yuan to download and register an app for Luckin. If tens of thousands of coupons are issued at one time, hundreds of thousands of customer acquisition costs can be saved.
• Accurately reach the crowd: Because the customer LTV is very high, the bank's back-end digital system is very advanced, and the entire customer management system is also very complete. When Luckin cooperates with banks, it can select the target crowd portrait from the back-end data circle, and accurately expose itself and attract new customers. Of course, the user volume of the bank is not small at all, and there is a lot of room for exploration.

Banks naturally did not suffer any loss. With the traffic resources provided by Luckin, banks can also accurately match young people and the new middle class, promote the growth of new users of retail financial services, and promote the increase of AUM. In this win-win model, Luckin split off a department to be responsible for cooperation with bank channels and implement independent assessment .

In fact, this type of cooperation has a long history. The book "Traffic Pool" mentioned that as early as 2017, China Auto Rental had achieved technical integration with the Air Travel app, and used the "First Class Plan" to deeply integrate the entire mid-to-high-end hotel resources, achieving "monopolistic" penetration in the vertical field.

Finally, let’s take a look at the steps involved in implementing Luckin’s joint activities.

The BD team responsible for the joint venture will screen partner brands on a daily basis, and strive for favorable resources through negotiations to achieve the prerequisite of mutual benefit. Afterwards, they will work closely with partners to promote the implementation of the joint venture project and conduct a review and summary. Because joint ventures will inevitably dilute the brand image, for example, whose main KV is used for marketing materials? Can the logo be placed in a more prominent position? Therefore, the BD team will strictly control the entire project to ensure that Luckin can highlight its brand image in each joint venture.

When selecting cooperative brands, Luckin also has fixed standards:

First of all, whether it is proactive or passive, Luckin requires that the user profile of its partners has a high degree of overlap with its own, especially young and fashionable people. After communicating with many experts, we found that the consensus in the industry is that the two parties to the joint venture must have a high degree of brand asset compatibility . The so-called cross-border does not mean the bigger the span, the better. The Moutai joint venture is an extremely special case.

Secondly, according to the resources owned by the partners, there are four levels. The special level is purely commercial cooperation, and the other party pays to purchase banners and other advertising space from Luckin's channels; the first level is the most resource-matching, and is also the priority partner of Luckin, and the resources that can be exchanged are very rich; the second and third levels have decreasing standards, and the resources provided by Luckin will gradually decrease. At the third level, it is basically a region-specific activity, and will not provide a large range of traffic for the partner.

3. Analysis of the joint marketing strategy of Jiangxiang Latte

Judging from the collaboration between Luckin Coffee and Moutai, they have successfully achieved the mutual benefit of 1+1>2.

The most intuitive point of mutual benefit is low-cost customer acquisition and conversion, which also reflects the role of product and effect integration.

Judging from the data of apps and mini programs, both Luckin and Moutai have achieved very obvious user growth. As mentioned above, Luckin's joint activities do not cost extra money, which is equivalent to using the cost of regular new products in exchange for explosive growth in active users. "i Moutai", a DTC digital marketing platform vigorously promoted by Moutai Group in the past two years, has also reversed the trend of declining active users in the past few months and set a record high.

From a sales perspective, the sales of sauce-flavored lattes exceeded 5 million cups on the same day, with sales exceeding 100 million yuan. Moutai directly supplies Luckin with tens of millions of raw materials, with a gross profit of more than 96%, which is a relatively impressive figure - after all, Moutai's ice cream and hotel businesses combined only generated 220 million yuan in revenue in the first half of 2023.

However, the cross-circle of people behind this is the greatest mutual benefit.

Luckin's main consumer group is young and fashionable people, who are generally under 35 years old, i.e. Generation Z. An organization tracked user order data and found that 40% of people who actually consumed Luckin were between 18 and 30 years old. Moutai, on the other hand, is a business and official circle, where people are generally over 40 years old, i.e. Generation X. Other surveys show that, excluding gift giving, the people who actually drink Moutai are generally between 43 and 60 years old.

However, if we look at the user interest distribution data of the app, the difference between Luckin Coffee and Moutai’s audiences is quite obvious – the “sense of surprise” and “sense of contrast” created by this collaboration is probably due to this.

Generally speaking, the user profiles of co-branded brands should be matched and overlapped as much as possible to achieve "mutual washing of traffic assets". However, this time, what both parties valued most was not traffic, but "mutual washing of brand assets". Although the differences seemed great, they actually matched their respective needs.

Moutai has been planning its youth strategy for a long time, and Chairman Ding Xionghui has paid special attention to the penetration of Generation Z. He recently said: From the "out-of-the-box" Moutai ice cream, to the "in-the-box" sauce-flavored latte, to the "official" liquor-filled chocolate, it is Moutai's brave attempt to "wear new shoes, walk new roads, and walk beautiful paths."

Why is Moutai so eager to embrace young people? We think it is not that they want to sell wine directly to young people. It is normal that Generation Z cannot afford Moutai and has no interest in it. This may reflect Moutai's longer-term concerns: although Moutai's digital marketing and DTC transformation have been very successful, the company itself still lacks the ability to reach and influence young people. If there is a gap between wine culture education and brand awareness, what if Generation Z is still not interested in drinking Moutai after more than a decade when they are old enough to drink Moutai?

Therefore, what is important is not “selling Moutai by the drop” but “young people’s first sip of Moutai”.

For Moutai, using Luckin's brand assets to directly strengthen its brand awareness among young people also brought the brand a good result of "blowing the circle"; for Luckin, using Moutai's high-end brand image, it can further enhance its "value" and create marketing hotspots and social currency among young people. So from the data of the app, in September this year, Luckin's users under 30 years old continued to increase compared with last year, while Moutai's 31-40 year-old population increased significantly year-on-year.

Judging from the social exposure data, the proportion of Moutai brand audiences aged 18-30 has increased significantly compared with August, and the ability to reach young people has been greatly enhanced. For Luckin, it has reached a large number of new user circles over 30 years old who have not formed the habit of drinking coffee, and the richness of brand assets has been further improved.

However, we found that if Maotai sauce-flavored latte wants to become popular, it actually faces many obstacles. It cannot be successful simply by relying on the "golden signboard" of Moutai. The close tactical coordination between special forces and heavy cavalry is the key.

From the perspective of products, alcohol + coffee is not a new concept created by Luckin Coffee, but a "new combination of old elements". Its appeal is not that strong, and it has not formed a sensational trend before. The combination of coffee and alcohol has formed a very mature category abroad, and it can be traced back to more than 200 years ago. In the standard formula of the International Cocktail Association (IBA), many styles add coffee as an ingredient.

From the perspective of marketing communication, joint marketing activities have become very "involuted" in the consumer industry, and consumers are clearly experiencing aesthetic fatigue. According to socialbeta data, a total of 664 joint marketing activities occurred in the period from March 2022 to March 2023, accounting for 15% of all marketing activities - among which the food and beverage industry has the largest number of joint marketing activities.

We believe that Luckin Coffee has two core strategies to overcome resistance, which also conform to the commonalities of many benchmark joint activities:

1. Content creativity drives social communication

First of all, the breakthrough comes from content creativity that can really impress consumers. We also believe that in the future development of joint marketing, the key to success is whether high-quality content can be produced. Relying on brand assets to hang a logo and "live off the past" is probably no longer feasible.

Luckin has put a lot of effort into content creativity. Whether it is the various graphics and texts for online promotion, short video materials, spokesperson blockbusters, or offline packaging materials and store displays, they all reflect Luckin's strong content supply and circulation capabilities.

These contents can stimulate heated discussions among consumers and bring social traffic because they trigger the "social leverage effect" : when an event is spread on social media, the event content has certain characteristics that trigger unexpected self-propagation, secondary and even tertiary propagation, producing a communication effect that far exceeds conventional marketing investment. These characteristics extend the lever arm, so that a small amount of marketing investment can leverage a huge communication effect.

In the past research on Weibo event marketing, Growth Black Box summarized this model for the first time. Luckin's content system is very consistent with the two "leverage factors" of derivative value (there is room for secondary creation) and social value (integration into the language system of the target circle) , but the core battlefield has shifted from Weibo to Douyin and Xiaohongshu.

With the help of leverage factors, two topics that are crucial to this communication were born:

(1) Is drinking a sauce-flavored latte considered drunk driving?

Through the analysis of Douyin user comments on Chan Mofang, we can find very obvious characteristics: for the Moutai brand, users were mainly discussing "how much money" in August, but after the joint launch in September, it became "driving" and "drunk driving"; for the Luckin brand, in August the topics were "delicious" and "checking in", but in September it was still "drunk driving".

What’s interesting is that people never discussed “sauce aroma” before, but the launch of sauce aroma latte has brought the “sauce aroma” to the minds of young people – so it seems that Moutai has really won.

On the other hand, Weibo, as a classic channel for event marketing, exploded on the day of the launch. #Luckin responds to whether drinking Moutai co-branded coffee can drive# This topic brought 660 million hot readings and 12,000 original content. At the same time, the topic also occupied the top search for more than 10 hours.

(2) Is the sauce-flavored latte unpalatable?

As a UGC and highly interactive channel, Xiaohongshu seems to have created a big stage for users to "complain". Through the analysis of Xiaohong's notes and comments, we can see that the keyword with the highest proportion in Luckin Coffee recently is "unpalatable". At first glance, it seems to be a negative public opinion about the brand, but it is not the case - we can find that most people did not criticize Luckin Coffee, but asked others "Is it really unpalatable?" Of course, some people do complain about not being used to the sauce-flavored latte. In the comments below, many users' curiosity obviously overcame reason, and they all said "I must try it!"

2. Carefully planned global marketing links

Secondly, content creativity can reach consumers frequently and accurately, so that the benefits brought by the joint venture can be long-term rather than short-lived, achieving the goal of product and effect integration.

As mentioned in the previous data, with so many brands doing joint ventures, isn’t it true that traffic is “nowhere to go”? Even if the content is good enough, where can we exchange new users?

In fact, most users are not reached by co-branded marketing at all, and there are still many hidden exposure/interaction/conversion opportunities that have not been tapped . The latest survey shows that the average number of media contacts of Chinese consumers reaches 15 per day, and there is a clear trend of media contact time saturation and contact point fragmentation[7]. Therefore, many brands are busy making do with limited resources in the customer journey, and the content creativity they have worked hard to create may not be perceived by the target users.

But Luckin Coffee has heavy cavalry as its main force and a very complete digital infrastructure, which has built a rich omni-channel marketing chain and can efficiently reach target users with the help of content.

Let’s focus on Luckin’s four main digital marketing platforms in this joint marketing campaign: Douyin, Weibo, Xiaohongshu, and WeChat private domain.

(1) Tik Tok PGC concentrated explosion

According to data from Cicada Cube, Douyin has become the core channel for this joint marketing campaign, with Luckin's brand exposure exceeding 1 billion in September. September 4th became the starting point for Luckin's explosive promotion, with brand exposure approaching 300 million on that day and the number of promotional videos approaching 25,000.

By comparing the data in August, we can find that during the always-on promotion period, Luckin's brand exposure mainly came from the tail influencers with 10,000 to 100,000 followers. However, during the joint campaign in September, the influencer types changed significantly, and the number of top influencers (with more than 1 million fans) and the exposure they brought increased significantly. This shows that using the potential of top influencers to accelerate brand communication is still an indispensable option.

In addition, among the influencers with more than 5 million followers, there are actually quite a few news media accounts that report on the sauce-flavored latte as a major event. Considering that mass media is also a key booster for breaking circle communication, we have reason to speculate that this is one of Luckin's official strategies.

Judging from the types of accounts of these influencers, their daily communication activities are mainly concentrated in the very vertical food category. During the joint marketing period, other types of accounts contributed more exposure and interaction. Therefore, in order to focus on the volume of voice, it is also necessary to expand more interest circles and areas, and not limit it to the existing audience .

So, who made the biggest contribution to Luckin Coffee’s promotion? Data shows that mid-level influencers have a very strong ability to bring products, not just “eat melons”. At the same time, they also contributed a lot of exposure and interaction .

For example, the two guys below posted dozens of promotional videos in a week, all of which recommended the new product, Maotai Latte, and even used the slogan "Young people's first cup of Maotai". Although they only have tens of thousands of fans, the exposure in the week after September 4th was able to reach more than 20 million.

Looking through their previous historical records, we can see that the content they posted usually only had a few hundred impressions, but after the event went online, it suddenly soared to millions - we didn't delve into the specific principle, but there is also the possibility that the official investment was used to heat up the video.

(2) Weibo Hot Searches & Super Topic

Weibo is a mature event marketing channel, and being on the hot search list is a classic operation of Luckin Coffee, which everyone may have a certain understanding of. Therefore, we will not go into details. Friends who are interested can review our in-depth research report on Weibo event marketing strategy.

(3) Natural dissemination of UGC on Xiaohongshu

In fact, when we first saw the data from Xiaohongshu, we once suspected that there was something wrong with the system. The number of notes reached its peak on September 4, but the total interaction volume (accumulated values ​​such as likes and comments) did not fluctuate much. Instead, it peaked on September 10 and continued to reach high points in the following month, maintaining its popularity.

Later, when we verified it with the popularity of keyword searches, we realized that UGC communication should have such characteristics. There must be a gap between the fermentation of an event and the creation of a truly popular UGC content. Users always have to queue up to buy coffee before coming back to participate in posting and discussions, right? How can there be social resonance without personal experience?

From another perspective, the advantages of UGC are reflected in the fact that the communication cycle will be greatly continued, and users can continuously generate new ideas to drive secondary and third communication, so the total interaction throughout September has been growing.

From the perspective of blogger types, Xiaohongshu's UGC communication model has also been further verified. Regardless of whether there is a joint marketing activity, the proportion of KOC and amateurs (less than 1w fans) has always been higher than 95%, and no business notes were monitored during the communication week. Although food topics have always dominated, the proportion of life records during the communication period has increased significantly, which also shows a certain circle-breaking effect.

According to Chan Xiaohong's data, it can be found that a large number of notes with "low fans and high praise" contributed a lot of fans with only double-digit numbers of fans of these accounts, but produced tens of thousands of interactive hits. The content is also very real and there is no trace of promotion.

We are very curious about one point: Why will there be such a significant increase in interaction volume on September 10 and 21? What is the content so popular?

The query results shocked us very much: it turns out that for Luckin, Fan Ren Er Chuang is the top star of Xiaohongshu! With the strong CP formation of Mixue Bingcheng and Luckin Casino, it seems that Luckin not only broke the public circle, but also built the Z-generation circle.

(4) Long-term operation of private domains and video accounts

For the real "traffic pool" of private domains, hundreds of millions of users have generated huge fission transmission energy, and it is more accurate and lasting than public domain marketing. From the day of launching on September 4th, until Luo Xiang endorses new packaging in November, the community touchpoint continues to push content related to sauce-flavored latte to users. Although the total number is not large, it includes a variety of types such as guiding transformation, feeding back to the public domain, promoting interaction, covering the main stages of the user's life cycle.

However, from the perspective of corporate WeChat marketing strategies, Luckin has not made special adjustments to the sauce-flavored latte, but has continued to use LBS to issue coupons to stimulate conversions.

It is worth noting that the WeChat ecosystem is not only the reach of private domain traffic pools, but also relies on video accounts to generate more public domain brand exposure and precise traffic. Luckin has prepared a large amount of content for the sauce-flavored latte in the video accounts, covering the entire September transmission cycle.

Among them, the video of the production of sauce-flavored latte has become a big hit. We estimate that there are at least 2 million views, which greatly promotes the spread of the circle. In addition, Luckin's video account provides online ordering and micro-entry for enterprise addition, so that new public domain traffic can be deposited into the private domain again and form a closed loop of conversion.

The live broadcast of the video account that Luckin has put into operation in 2021 is also quite distinctive. The daily live broadcast time once exceeded 9 hours, and the number of viewers is nearly 300,000. Unlike the traditional live broadcast, Luckin focuses on the concept of "online coffee shop" and takes the companionship and slow-paced route. Most of the live broadcast room is chatting with users and giving benefits.

On the other hand, Luckin will not import existing private domain users into video accounts like other brands to realize existing monetization – Luckin never publishes live broadcast links in the community, but relies on the public domain capabilities of video accounts to get new increments.

During this joint marketing activity, Luckin Video Live Room replaced the new VI of the sauce-flavored latte, and the scene view exceeded 200,000, providing strong assistance in both exposure and conversion.

IV. Conclusion

After reading the disassembly of Luckin’s joint marketing, everyone will definitely have more thoughts: Should my brand be used for joint branding? What prerequisites should be met if it wants to use joint branding as a long-term strategy?

First of all, although joint marketing looks very popular and has many successful cases, it is not suitable for most brands. The essence of joint marketing strategy is to give full play to the compound interest of brand assets, but how many brands have the influence of Luckin and Heytea? Let’s give an inappropriate example: When you have 10 million spare money, you can only make money by investing and financial management, which is worth investing; but if you only have 100,000 yuan in your pocket, what’s the point of studying financial management? It’s better to make your first pot of gold through labor appreciation as soon as possible.

Therefore, when you have insufficient brand assets and product strength, it will inevitably waste time and energy. It is more practical to cooperate in depth with channels to sell goods. However, brand assets are not simply competing for scale. If the brand strength and product strength are unique enough, such as the penetration rate in some niche and high net worth circles is high enough, even if the size is not large, there is a chance to win cooperation among leading brands.

Secondly, clear strategic planning is another necessary prerequisite. In the previous article, we did not evaluate the advantages and disadvantages of different joint-branding models of each company. Whether it is the main line or the branch line, everyone actually has their own strategic positioning and is results-oriented. If you just try it out with the mentality of "touching lottery" and lack long-term planning, there is a high probability of risk. In this regard, you can learn from Luckin to establish a "special force" group and conduct flexible resource allocation and strategic iteration to avoid some risks. The joint-branding activities are better than lack of anything.

Finally, it is the ability to have in-depth insight into consumer demand and market trends. As mentioned above, one of the key strategies for joint marketing to succeed is to produce sufficiently high-quality and differentiated content creativity. As joint marketing becomes more and more inclined, its core competitiveness is driven by content. The assets of both brands are in front of them. At what points should be integrated to truly impress consumers? How to rely on content creativity to promote sales growth?

Co-branding is just a form of brand connotation expression. The biggest feature is that it can generate the effect of amplifiers with the help of external resources. However, without the market insight, it is useless to add "0" to the joint brand afterwards - it cannot get the real needs and pain points of consumers, and does not understand market changes. How can we have creative and effective strategies that are deeply rooted in people's hearts? This is not only a problem with the joint brand strategy, but also a common problem of digital marketing in all regions.

Therefore, we must rely on data guidance to build a scientific system and continue to:

1. Insight into category trends, explore high-submarine tracks to analyze sub-categories, interpret leading brands anchoring high-growth categories/brands/commodities/selling points
2. Disassemble competitive growth factors, look at the potential competitive exploration of market share, and plan competitive strategies in advance.
3. Panoramic insight into e-commerce business, grasp the brand operation status, self-operation/agent/distribution, flexible management of multi-channel high-quality stores/high-quality numbers/high-quality products, efficient operation and management
4. Analyze the industry/competition/this product, formulate marketing strategies to analyze e-commerce/plant grass/tap water, optimize communication channels to analyze activities/events/topics, and improve communication effect
5. Analyze consumer reviews, find new opportunities in categories to listen to consumer soundtracks, guide product iterative development to capture negative/major events, and maintain brand image

References:

[1] "Lucky Cindergarten Quarterly Report Illustration: Revenue 6.2 billion increased by 88% year-on-year, with a total number of stores reaching 10,836", Daily Food

[2] "Why can Luckin's E-man Marketing understand, but can't learn it?", CBNData

[3] "After the sauce-flavored latte, Moutai has made another big move!", Daily Economic News

[4] "Looking at the long-term concerns of Moutai from the success of the sauce-flavored latte", Jingyi Investment

[5] "Heytea: How is the ceiling of the joint marketing industry refined?", case SHOWCASE

[6] "2022 Brand Outcome Guide: Leveraging Social Leverage", Growth Black Box

[7] "2023 Chinese Media Trend White Paper", Consumer Voice

Author: yolo

Source: GrowthBox Growthbox (ID: growthbox2), cracking the black box for commercial growth.