Business Week and Interbrand have listed the top 100 brands all over the world recently (kind of market study in China), and Starbucks coffee is the 91st because of its $3 billion brand value. The company has spread its business to many main blocks and streets in a lot of countries, over the past 30-year-development. Starbucks entered China market as a franchising and joint venture. With the increase of profits from China market, the company tended to have more rights of voice and control in the cooperation.Therefore, Starbucks gradually changed it’s business model in China. And this change is worthwhile to be discussed and learnt.
Tea Shops in China
We kown that tea and coffee are in a highly intense competition.As a typical brand of coffee, Starbucks faced a serious crisis. The demanding of changing the tactics is imminent.Thus the company decided to open some tea shops as well. This idea that merges two contradictory kinds of drinks seems unfeasible, but lead to ease the competition between two industries in fact. Drinking tea is one of the cultures in China. Starbucks sells tea is a way to win over the customers like young chinese.
Festival Foods in China
In order to occupy the festival market in China and satisfy the taste and demanding of Chinese consumers, Starbucks released Starbucks mooncake and Starbucks zongzi in recent years. In the first year when Starbucks sold mooncakes, it did not do that very well. But from the second year, Starbucks combined the mid-autumn festival theme with it’s coffee culture, created a new kind of mooncake named coffee mooncake. And occupied a certain share of mooncake market in China.
Cups in coffee shops in China
Starbucks not only sells coffee, tea, coffee beans, or mooncakes, which satisfies the chinese tradition, but also sells cups. It’s tumblers are very popular in China, which are often sold out in couple weeks. So are it’s mugs. No matter in offices or schools, cups with LOGO of Starbucks are everywhere, which means the market of Starbucks’ cups has already spread from white-collars to students. Cups of Starbucks are broadly classified into two categories, tumblers and mugs. It can also be classified by themes, which are charm-LOGO cups, city cups, thematic mugs, etc. Starbucks released a type of city cup which is relative to China in 2004. Many big cities like Shanghai, Hong Kong and Beijing designed their mugs and mini cups.
Starbucks entered China in 1999. The company targeted young consumers in China. And it predicted that the lifestyle of young people will increase their demand of coffee. Wang Jinlong, CEO of Starbucks in China said they had to reach two targets. The first is to supply a new kind of place to hold parties which can introduce a new lifestyle. The second is to combine Chinese tastes with products from Starbucks and spread the new taste into the whole world. In order to realize the second target, Starbucks has been making adjustment to satisfy local people.
In summary, Starbucks set a very good example of combination between different drinks and food cultures. It is creative and full of challenging spirit. We believe that Starbucks will have a very stable development in China.
Edited by Amy Wang from Daxue Consultant China
Credit Photo: Baidu
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