Luckin Coffee’s private domain operation strategy!

From setting the world's fastest IPO record to being exposed for financial fraud, stock price plummeting, suspension of trading, and closing of a large number of stores, Luckin Coffee went from being in the limelight to being on the brink of bankruptcy. Three years have passed, and Luckin Coffee has "fully recovered", which makes people wonder what its wealth code is? Perhaps, Luckin’s private domain layout can give us the answer.

1. Luckin Coffee after the reshuffle

In 2017, Luckin Coffee opened its first store. At that time, Luckin's spokespersons were still Tang Wei and Zhang Zhen. In less than a year and a half, Luckin Coffee had more than 4,500 stores.

In May 2019, Luckin Coffee, which had only been established for 18 months, rushed to the Nasdaq in the United States to complete its listing plan. However, the following year, Luckin Coffee was exposed for financial fraud and infighting among senior executives, and its brand image plummeted to the bottom. In June 2020, Luckin Coffee was officially suspended from trading on the Nasdaq Stock Exchange.

Three years later, Luckin Coffee has quietly reversed the situation of being on the verge of bankruptcy. According to the unaudited full-year financial report for 2021 released by Luckin Coffee , Luckin's total net revenue in 2021 was 7.965 billion yuan, a year-on-year increase of 97.5% from 4.033 billion yuan in 2020; the average monthly transaction customers in fiscal 2021 were 13 million, a year-on-year increase of 55.2% from 8.4 million in fiscal 2020; and as of the end of December 2021, the total number of Luckin stores had reached 6,024, surpassing the total number of 5,400 stores of coffee giant Starbucks in China.

Image source: Gelonghui APP

During the 2022 Winter Olympics, when Gu Ailing won the championship in her first event, the news that Luckin Coffee signed Gu Ailing as its brand spokesperson also became a hot topic. At that time, Luckin was a complete winner in life. Amid the national carnival, Luckin’s products similar to those launched by Gu Ailing were a big hit, and its brand image was also reshaped.

So, what did Luckin Coffee rely on to accomplish this beautiful “comeback”?

In July 2020, Luckin Coffee’s CMO said in an interview with the media:

Since establishing the community after the epidemic, Luckin Coffee has 1.8 million private domain users and more than 1.1 million community users in just three months. Private domain users contribute more than 35,000 orders per day, and more than 100,000 orders are promoted through in-community contact. After users became private domain users, Luckin’s monthly consumption frequency increased by 30%, the number of weekly repeat purchases increased by 28%, and monthly active users increased by about 10%.

In other words, private domain + community has become Luckin's most important source of orders after APP and mini programs. For Luckin Coffee, what changes have taken place in its private domain layout? How did they do it?

2. How does Luckin Coffee operate in the private domain?

As early as June 2021, public data showed that Luckin's private domain users had accumulated to over 10 million, with 35,000 communities. Faced with such a large number of private domain users, let’s take a look at how Luckin Coffee conducts highly sophisticated private domain operations .

1. Launch on multiple platforms to build a solid user base

The first time Luckin Coffee came into the public eye was when it started with its aggressive money-burning subsidies, and free meals for new users were common. Although Luckin Coffee no longer has free offers for new users, its promotions have been replaced by “half price on the second cup” and “48% discount coupon”. Luckin Coffee has become more expensive, but at this point it has already completed consumer education for its users.

In order to reach more users, Luckin Coffee chose to carry out large-scale brand exposure on platforms such as Douyin, Xiaohongshu, Weibo, and WeChat Moments. This multi-platform traffic marketing quickly captured consumers in a short period of time.

(1) Social platforms

Luckin Coffee has deployed a large number of KOL/KOC on platforms such as Xiaohongshu and Douyin. The content revolves around store visits, reviews, ordering guides, etc., and its grass-planting attributes are more prominent. The grass-roots marketing on social platforms directly led to sales growth. Luckin's raw coconut series once achieved a monthly sales volume of over 10 million cups.

Kuaishou, Douyin, and Xiaohongshu

(2) Live streaming sales

Douyin : Luckin has three Douyin brand live broadcast rooms, namely Luckin Coffee luckincoffee (998,000 fans), Luckin Coffee flagship store (55,000 fans), and Luckin Live Broadcast Room (127,000 fans). The live broadcast duration is basically around 12 hours. The types of goods sold through live streaming include beverage coupons and set meals.

Video account : The live broadcast time is not fixed, and the live broadcast scene is Luckin's offline physical store. In addition to displaying coupon QR codes, drink recommendations and other related information on the live broadcast background, the live broadcast content is the daily operations of the store clerks at the bar.

Taobao : It adopted the popular virtual anchor model to introduce Luckin's products and peripherals to consumers through virtual anchors. The virtual anchor’s speech is intelligent, including “Welcome xx to the live broadcast room”, “Baby, click the follow button in the upper left corner of the live broadcast room, and you can enjoy more fan benefits after following” and other live broadcast speech.

(3) Offline advertising

Luckin's users are mostly concentrated in first-tier cities, new first-tier cities and second-tier cities, and the consumer group is mostly young white-collar workers aged 20 to 29. Advertising spaces in office buildings and elevators are naturally Luckin's advertising targets. The advantage of this channel is that the target population can see Luckin's advertisements everywhere on their way to and from get off work, and gradually develop consumer brand awareness.

2. Draw users and create a private traffic pool

After having a stable user base, Luckin Coffee began to leverage users' social relationships to complete secondary user fission while building its own private traffic pool.

(1) Official Account

The number of headline views of Luckin Coffee's official WeChat public account has basically remained at over 100,000. In addition to clearly marking the coupons in the titles of its daily tweets, such as "Get Coupons" and "46% Off Coupons", the text also contains reminders for getting coupons in prominent positions . There will also be rewarded interactions at the bottom of the headlines . The official will draw 10 users who forward and comment each time to get free drinks of the new product.

On the other hand, Luckin Coffee has set up a jump link for receiving coupons in the welcome message and menu bar of the official account. In short, users can quickly find the location to collect coupons wherever they can see, which strengthens their consumption awareness of "collect coupons first and then drink coffee."

In order to attract users to its own private domain, Luckin placed a prompt of "42% off for joining the group" at the top of the secondary menu. After clicking on it, a poster will appear to guide users to add "Luckin's Chief Welfare Officer Lucky". After successful addition, users will receive a "group joining link" and a poster guiding them about the welfare group. In this way, Luckin has accumulated target users one by one whether it is its corporate WeChat account or corporate WeChat group.

(2) Mini Programs and APPs

Mini programs and apps are the two major consumer channels that carry Luckin’s private domain traffic. Their homepage layouts are almost the same, using half of the screen to display Luckin’s preferential benefits . In the welfare center, Luckin also launched a task area, where the top 20 users who place orders each month can receive corresponding rewards. It can be said that every setting of Luckin Coffee is designed to allow users to settle on its own channels and quickly complete order conversion.

(3) Social fission

Whether in the menu bar of the official account, or on the mini program or APP, Luckin has set up an activity in a prominent position to invite new customers to get a 20 yuan discount on their first cup, and has provided detailed participation steps. In addition, there is an activity where users can get a 3.8% discount coupon for every 2 people they invite. Luckin’s “Group Buying and Discounting” campaign on its mini-programs and apps also leverages users’ social relationships to expand its customer base.

(4) Offline store traffic diversion

For Luckin Coffee, which has more than 6,000 stores in total, attracting traffic from offline stores is naturally indispensable. First, Luckin set up a welfare group QR code sign at the food pickup counter to attract consumers waiting to pick up their food to scan the code and join the group; secondly, when placing an order, the store clerk will also guide consumers to scan the code to join the welfare group, receive the coupons and then place an order.

3. Take over traffic and refine operations

After attracting users to corporate WeChat and corporate WeChat groups, Luckin Coffee began to increase user retention and activation, continuously improving the repurchase rate. How is it done specifically?

(1) Establish communities based on geographic location

There are two ways for users to join the Ruixing welfare group. One is for users to search for the store name and add it through the group entry link; the other is to identify the poster QR code sent by Chief Welfare Officer Lucky and directly enter the nearby store welfare group. Naturally, the naming of Ruixing Liqun is also a combination of "brand + region + store name + community number".

(2) Community content

Luckin’s community content mainly consists of welfare activities, product recommendations and interactions. However, there are some considerations in the arrangement of content.

First of all, you can enjoy the benefits as soon as you join the group. As soon as users enter the Ruixingfuli group, they will receive an exclusive @ from the Chief Welfare Officer lucky, informing them that the coupons have been issued and attaching solutions for not receiving the coupons. In this way, it is easy to gain the trust of users (the coupons are real, not fake). At the same time, Luckin also set up instructions for receiving coupons in the group announcement.

Secondly, the Chief Welfare Officer will attach preferential benefits every time he releases a product recommendation , and Luckin’s coupons are automatically credited to users’ accounts. Users can place an order by clicking on the mini program, shortening the user conversion time.

Furthermore, Luckin’s welfare group will occasionally release welfare activities that can only be participated in on other platforms such as Douyin and Xiaohongshu, which can not only increase user stickiness, but also make the traffic of all its platforms flow .

It is worth noting that the time when Luckin’s chief officer posts social media content is basically fixed throughout the day. Jam Girl made a rough calculation:

(3) Moments Operation

In the Chief Welfare Officer’s circle of friends, we can see that the frequency of content release is one or two posts a day, and it will not cause trouble to users by flooding the screen with content. The content of the Moments is mainly welfare activities such as coupons, video product promotions and product recommendations, and all accompanying posters are equipped with mini program codes, and users can place orders after identifying them.

(4) One-to-one service for corporate WeChat personal accounts

Different from the high-frequency push notifications in social networks, although the content released in Luckin’s corporate WeChat personal account is mostly in the form of a combination of product recommendations and welfare activities, the frequency is not high. Content will be sent automatically about 2 to 3 times a month, sometimes only once a month.

(5) Cross-border collaboration to stimulate consumption

Luckin Coffee’s most recent cross-border collaboration is undoubtedly the “Coconut Cloud Latte” launched with Coco Tree Coconut Juice, which has been trending on major social platforms and netizens have flocked to try it out. As of April 17, 2022, the sales volume of "Coconut Cloud Latte" exceeded 4.95 million cups in one week after its launch, with total sales exceeding 81 million.

Image source: Pan Hu Packaging Design Laboratory

From "yyds Raw Coconut Latte", "Sakura Season Limited Latte" to "EDG Limited Collaboration", Luckin's collaborations have closely captured the interests of young consumers and combined with current trends. In addition, Luckin Coffee has cross-border cooperation with major bank credit cards, Alipay and other payment brands. The second to last post on its official public account is basically co-branded with credit cards from major banks.

(6) Membership system

Luckin’s membership system is divided into two channels: mini programs and APP, as well as e-commerce platforms such as Taobao and JD.com.

On the mini program and APP , Luckin Coffee divides its membership plan into 6 levels. The level upgrade is determined by the number of valid blue beans generated by the user's order. The membership is valid for 90 days. The benefits and privileges that each level can enjoy are different.

In addition, Luckin Coffee has also launched paid membership cards, including the Luckin Freedom Card and the Raw Coconut Freedom Card. The benefits and privileges corresponding to these two types of free cards are also different.

On the Taobao and JD e-commerce platforms , Luckin Coffee does not have paid memberships, but instead adopts a free membership model. Users only need to authorize to become ordinary members, and members can receive exclusive coupons. At the same time, Luckin Coffee has set up a membership points system to reward points based on the user's consumption amount. Users on Taobao can also redeem products with their points.

JD.com on the left and Taobao on the right

3. Conclusion

Finally, Jam Girl gave a summary of Luckin’s private domain layout.

Although many people think that Luckin’s community is a “dead group”, judging from the revenue growth brought by Luckin’s private domain, this community operation method is still meaningful for reference.