Luckin Coffee x Moutai, what is the underlying logic behind the first-day sales exceeding 100 million yuan?

The recent collaboration between Luckin Coffee and Moutai has sparked widespread discussion and provided valuable lessons for marketing. This article explains the importance of a successful marketing strategy from multiple perspectives and suggests ways to stand out in a competitive market.

The hottest event this week should undoubtedly be awarded to Luckin Coffee x Moutai "Soy Sauce Latte".

“Young people’s first cup of Moutai”

“Middle-aged people’s first cup of coffee”

From both Luckin and Moutai's perspective, this is a huge success. The chemical reaction of "fine wine + coffee" and Moutai's high popularity have made "Jiangxiang Latte" attract a lot of attention this week. I originally thought that Heytea was the ceiling of the joint venture, but I didn't expect it to be surpassed by Luckin Moutai in one fell swoop and left it far behind.

There are many articles analyzing the reasons for success, but I would like to analyze it from a case perspective. A deeper thinking may give marketers some inspiration:

First, are the hot products getting more popular or does the logic need to evolve?

Second, is there a centralized approach in the era of fragmented attention?

Third, how to achieve unity between emotions and consumption?

What does it mean? Let's talk about it one by one:

1. The evolution of the logic of hot products: Raw latte is a hot product, and sauce latte is a mindset

First of all, "explosive products" have been a "pass" for new consumption to enter the market in recent years. By creating explosive products, they can occupy the market. Therefore, whether or not a new consumption enterprise can incubate explosive products and whether or not it has the ability to create explosive products has become an important ability for a new consumption enterprise. Every consumption enterprise is making every effort to invest resources to "create" explosive products.

Why is it becoming increasingly difficult to create hit products?

There are three situations: the first is that traffic is becoming more and more expensive, and it is becoming increasingly difficult to create hit products, making it difficult to scale up; the second is that under the thinking of creating hit products, new brands can easily form a situation of "having products but no brand", and consumers' insufficient awareness of the brand will lead to dependence on traffic and KOLs, and insufficient repurchase and loyalty; the third is to fall into the innovator's dilemma, incubate hit products, fail to establish barriers, and be copied by competitors.

From the Luckin-Moutai collaboration, we see a new solution that seems to be able to solve the above three problems. It is not only a product, but also a brand barrier.

In 2021, Luckin Coffee launched the Raw Coconut Latte, which was also very successful and became a big hit when it was launched on the market. However, other brands quickly followed suit, and homogeneous competition emerged in the market. Luckin Coffee failed to occupy the minds of the people of Raw Coconut Latte.

However, from a competitive perspective, "Jiangxiang Latte" has more barriers, and the joint brand has the "exclusivity" of brand effect. Let the product rise to the level of a brand, and the hot product has both "growth" and "mind".

As early as 1970, BCG developed a matrix framework for analyzing products, analyzing the contribution of a product to a company from the perspectives of "relative market share and market growth rate." Market share measures mindshare to a certain extent. The higher the market share, the stronger the competitiveness.

If a hit product does not have a brand, but only has growth attributes, it is difficult to occupy the mind and gain long-term market share. Therefore, the logic of creating products should not only pursue hits, but also create "star products" that belong to the company in the long term. Make your product topical, exclusive, and socially aware , not just a hit, but a star.

2. Combination of kinetic energy: Centralized approach in the decentralized era

Secondly, I see the possibility of becoming the “focus” in the era of decentralization.

In June this year, Luckin opened its 10,000th store in Xiamen, becoming the first coffee chain brand in China to exceed 10,000 stores. The scale of 10,000 stores does not simply mean the growth of channels, but also tests the comprehensive strength of the enterprise. 10,000 stores means that there is one brand store for every 100,000 people. The brand's purchasing convenience and touchpoints are strong enough to better reach consumers offline. At this time, it has sufficient sales capacity and needs stronger potential traction to drive the entire market scale.

This wave of joint ventures for sauce-flavored latte is a strong brand traction after the opening of 10,000 stores. It not only formed a high-profile brand potential, but also strongly drove store sales.

In terms of sales performance, the sauce-flavored latte was launched on September 4th, with an original price of 38 yuan per cup and an actual price of 19 yuan per cup. On the first day, 5.42 million cups were sold, with sales exceeding 100 million yuan. On the second day of sales, the mini program crashed due to too many visitors, and there were long queues at Luckin stores. Compared with Luckin's most successful hit product in the past, the fresh latte, the first day sales were 1.31 million cups, far exceeding the historical record.

It even pushed Luckin Coffee's stock price up by 5%. This gave channel dealers and franchisees greater confidence in both brand and sales, allowing Luckin Coffee to continue expanding its store openings and maintain high growth momentum. This signal undoubtedly gave positive feedback and strong confidence to the capital market.

Therefore, the deeper reason for success is that Luckin’s terminal layout and extremely high brand potential have completed a positive cycle of brand and sales.

According to the theory of kinetic energy, the Luckin x Moutai joint venture is a typical example of the combination of "kinetic energy brand and potential energy brand". Luckin's 10,000 offline stores have strong sales capabilities, and Moutai itself has strong brand power. Through the "chemical reaction" of the joint venture, brand potential energy has been formed, which has been screened in the circle of friends and listed on Weibo hot searches. As a result, Luckin's stock price has soared, and Moutai has soared. This is not only a joke from netizens that Luckin "married into a wealthy family", but also allows Moutai to penetrate into the young group, "the first Moutai for young people", and cultivate longer-term user value.

Similarly, HEYTEA’s collaboration with FENDI and MANNER Café’s collaboration with LV twice all use the same strategy, forming a set of formulas: the “kinetic energy” of the channel capabilities of fast-moving consumer goods + the “potential energy” of luxury goods’ brand power = growth + mind.

These cases well illustrate that in an era of traffic involution, serious attention fragmentation, and decentralization, there is also a "central approach", that is, a combination of kinetic energy and potential energy . The terminal's reach is from bottom to top, and brand potential energy is from top to bottom. Strong brand potential energy can stimulate greater sales capabilities of the terminal. Empower the terminal through potential energy and reach consumers directly through the terminal.

3. Topic protagonist: Emotion and consumption go both ways

Third, let’s talk about how to build potential energy.

In the past, it was often reached through strong media, but now it is through strong “social topics”.

In today's world controlled by algorithms, how can brands break out of the "information cocoon"? My answer is that topics form a hot spot effect. Centralized media does not exist, but centralized topics do. A high-potential topic can cross platforms and break circles.

Replaying the whole incident, the fermentation of Jiangxiang Latte on Weibo is very telling:

On September 4, the joint model was the first to become a hot search
#Luckin Sauce Flavor Latte# #Moutai Luckin Sauce Flavor Latte#
Then some netizens began to pay attention to the fact that although the combination of wine and coffee is good, can you drive? Luckin customer service responded
#Luckin customer service responds to whether the Moutai joint brand can drive#
In view of the scarcity and high value of Feitian Moutai, a picture of a "milk drink" was circulated, and many netizens questioned whether it was real Moutai. Then Luckin Coffee released a production record video.
#Luckin Real Moutai#
#What you think Luckin is vs. what it actually is#
#Luckin Coffee releases raw material production record video#
Luckin Coffee responded that the surge in orders caused problems in both stores and ordering systems.
#Man smashes several cups of sauce-flavored lattes outside Luckin Coffee store#
#Luckin Coffee responds to a man who smashed several cups of sauce-flavored lattes#
#Luckin's ordering system appears to have crashed#

The September 5 incident started with the "Jiangxiang Latte" incident itself, and then moved on to the business side. Is it an infringement to add Moutai without authorization?
#Adding Moutai to coffee without authorization and selling it is an infringement #
Netizens "matched" Mixue Bingcheng and Wuliangye online, and the time on the list was as long as 18 hours
#Mixue Bingcheng Wuliangye#

On September 6, netizens "played with memes" to show the "generation gap" between the two generations
#Soy sauce latte has become popular in Korea#
#A cup of coffee and the silence of two generations#

September 7th: In-depth analysis from a business perspective
#Why doesn't Luckin Coffee pour Moutai directly#

Netizens' focus and the companies' responses and interactions have all become the context of the event, from the initial questioning, to the interpretation of big Vs, to the playing of cultural generational jokes. Compared with the "social currency" attribute of the circle of friends, the brand's new products have become a hot topic on Weibo .

Taobao's hot search spokesperson Shen Fangjun once said , "The hot topics on Weibo are like a series, because they are in line with the direction of an event and reflect the different concerns and emotions of users."

Not only that, the spillover value of Weibo is also very obvious. According to Zhiwei data analysis, Weibo's influence index is as high as 90%.

This kind of topic that can generate potential energy can create a hot spot effect and a common discussion atmosphere on Weibo, thereby affecting the direction of events and the public's attitude.

For another example, although Huawei launched the Mate 60 in a low-key manner, it was pushed to the top of the hot searches by netizens. Huawei has always been blocked by the United States to curb the development of Chinese technology companies. However, on August 29, when the US Secretary of Commerce visited China, the Mate 60 was suddenly launched in a "low-key" manner without any notice, and equipped with a domestic Kirin 5G chip. In this way, Huawei broke through the 1,566-day blockade and fought against the country with the power of a company. This uncompromising and unyielding spirit made netizens cheer. #Huawei# #Huawei Mate 60# has been on the top of the hot searches many times.

Netizen: This warm-up method is unheard of and unseen, and it has to be you. Netizen: I cried after watching it, come on China!!
Netizen: I got goosebumps watching this. Isn't this endless vitality our China! !

However, during this period, @青春湖北 posted a photo of the US Secretary of Commerce taken by Huawei Mate 60 Pro, which became a record of the historic moment, and #Take a photo of the US Secretary of Commerce with a Huawei phone# became a hot search.

That’s it. On Weibo, there is no need for fancy methods or exaggerated performances. Simple words can also highlight power, record the current moment, and resonate with the people.

The same scene is also happening in the automotive industry. On August 9, BYD's 5 millionth new energy vehicle officially rolled off the production line, becoming the world's first automaker to achieve this milestone. This is not only a new milestone for BYD, but also a testimony to the positive development of Chinese brands.

BYD founder Wang Chuanfu gave a tearful speech at the press conference, recounting BYD's 20 years of persistence, which has great significance for BYD and China's new energy vehicle industry. At this milestone, BYD did not just promote itself, but stood at a higher level, pulling the Chinese auto industry together and proposing #Together is China's Auto# .

13 new energy vehicles were placed outside the conference venue, and the entire automotive industry jointly expressed their views on Weibo:

#BYD's 5 millionth new energy vehicle rolls off the assembly line# #Many car companies respond to BYD's Wang Chuanfu sheds tears at the press conference# and many other terms have become hot searches. BYD has single-handedly increased the potential energy of the entire automotive industry and made the Chinese people more confident and proud of the automotive industry.

Whether it is the joint event of Luckin Coffee and Moutai, or the launch of Huawei Mate60 and BYD, it shows that a resonant content will ferment, discuss and spread on Weibo.

To sum up the topic, the deepest logic behind the collaboration between Luckin Coffee and Moutai is the upgrade of the explosive product thinking, from growth to mind; the combination of kinetic energy and potential energy forms a cycle of brand and sales; and the unity of emotion and consumption.

From this case, we can see that in the fragmented era, brands need to combine kinetic energy and potential energy to seize the opportunity to become the center of the topic. Creating topics, leading topics, and attracting media attention is a "centralized strategy" in the decentralized era and the era of consumer sovereignty, making oneself the protagonist and bringing in traffic.

Author: Party A Editorial Committee

Source: WeChat public account "Party A Finance (ID: jiafangcaijing2019)"