Business Blog – Kalin

When I feel free, I’d like to randomly read some of the students’ blogs to give myself some ideas about  marketing ideas. I just read BoZheng Yu’s blog about Starbucks’s expansion to China. I really agree with what he/she said and want to comment on something.

Based on my experience in China, the price for starbucks is really too high for major Chinese customers. A can of coke cost only about $3 RMB( = 0.45CAD), but a cup of starbucks coffee cost about 30-50RMB(4.5-7.5CAD) or even more. Based on the price, I really don’t believe that Starcbucks can be successful in China.

As I think several years ago, Starbucks will not have a lot of customers. Only very high class Chinese people will consume in Starbucks, and Starbucks will not expan to everywhere all over China. As time pass on, now, I feel that I got wrong. Starbucks is very successful in China now. Although it’s not same as Canada (see a starbucks in 3-5 min walk), it already has around 230 stores in mainland China (in total of around 500 stores in China including Mainland, HongKong, Macao, and Taiwan).

Why Starbucks can be successful in China? I did some research on that and find out some of the results.  First, as Bozheng said, the target market. Starbucks’s target market in China are the young generations from 18-30. As China develop so fast now, most families start to get better living standards and can have extra money to buy some luxury stuffs. (Starbucks in China still considered to be high value product). Therefore, these people are considered to be Starbucks target market. Also, young generation don’t really like the Chinese tradition tea. Most of them prefer Taiwaness Bubble Tea and Starbucks Coffee. Therefore, I don’t think tea is the indirect competitors of Starbucks as BoZheng said, instead of that, I considered that Taiwaness Bubble Tea is the largest competitor of Starbucks. For the direct competitor, there is a lot. There are many coffee shops in China, but none of them as large as Starbucks. Therefore, as my own consideration, I don’t see them as Starbucks’s competitors. Also, Starbucks changed a bit on its coffee’s taste to make them more fit on Chinese people. Although I myself prefer the North America’s version, but it seems Chinese people all like they ones they have drink in China. It’s kind of social consideration to change the coffee taste more preferable by Chinese people.

Starbucks did a lot to fit into Chinese culture. They made Chinese mooncakes during the right season as well.

Although Starbucks changed a lot to fid Chinese culture, they still keep their brand image very clear. All ordering pass from the person who order to the person who make the coffee, they all use English to communicate, even though they are all Chinese. It’s a good image of starbuck’s culture, and help Chinese people to understand more about Starbucks’s culture as well.

Anyways, Starbucks is very successful in China now. They are also considering to expan more in China to get even higher market share.