Ruixing achieved overall profitability

Tech planet exclusively learned that Ruixing coffee began to realize the overall profit of the group in May this year. This means that Ruixing coffee has fulfilled this year’s annual goal ahead of schedule.

This is undoubtedly good news for today’s bustling coffee market. Because Ruixing has once again proved the unlimited potential and imagination of the coffee market. But it’s also bad news. Ruixing, which is far ahead in the number of stores, has made profits and has more cash flow expansion. How much market share can other players seize?

A tims coffee employee’s first reaction after hearing about Ruixing’s profit is: does Ruixing have an international expansion plan? According to tech planet, Ruixing’s international expansion plan (into Hong Kong, China and the United States) was suspended after the financial fraud last year and has not been restarted so far.

As of May 31, 2021, Ruixing coffee has 3949 self operated stores and 1175 franchise stores in China, and plans to open 4800 to 6900 Direct stores in 2023.

A Ruixing employee said that after announcing the overall profit, Guo Jin, chairman of Ruixing coffee, must have set a more radical goal.

Tech planet asked Ruixing coffee for profit related information. As of press time, the other party had not replied.

At present, Ruixing is still far ahead in the number of stores. But the addition of wheat coffee and Starbucks may end this situation in the short term. For Ruixing, in addition to maintaining its own business data, it also needs to continue to maintain its advantage in the increasingly fierce coffee war, and profit is only the beginning.

The sustainability of the first profitable local company is the key

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Coffee is not a bad business, and Ruixing Coffee employees have great confidence in it.

After the exposure of financial fraud, many Ruixing Coffee employees once told tech planet that in the cost of a cup of coffee, the rent is 1-2 yuan, the labor is 3-4 yuan, and the raw materials are 6-7 yuan. The total cost is 10-11 yuan. If you sell it within 24 yuan, you can make money.

In their eyes, profit is taken for granted, not surprisingly.

After the fraud incident, Ruixing suspended all expansion plans. Originally, Ruixing planned to open 10000 stores before it came in 2021. Later, the strategy was to ensure that the number of stores remained unchanged by the end of 2020.

In the middle of last year, Ruixing coffee said at the 2020 national conference held in Xiamen that more than 4000 stores across the country were open as usual, more than 30000 employees arrived on time, and the number of new users continued to rise. In July, Ruixing’s single store cash flow had become positive (except for more than 300 unopened University stores). At that time, Ruixing coffee management predicted that the company would achieve overall profitability in 2021.

On January 7, 2021, Ruixing’s employees received an email from the president’s office, including: by November, more than 60% of self operated stores had realized store level profits, and it is planned to realize overall profits in 2021.

Now, Ruixing has achieved this goal ahead of time and exceeded the goal. Tech planet learned that in May and June this year, Ruixing coffee has achieved overall profit for two consecutive months, with an amount of tens of millions of yuan. A person familiar with the matter said that the outbreak of raw coconut latte accelerated the profit process, and all stores had made profits at that time.

This means that Ruixing is the first local coffee company to make a profit“ Now it depends on whether the profit can be sustained, because summer is the peak season and winter is relatively off-season, “said a Ruixing employee.

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