https://blogs.ubc.ca/nikolanedev/2013/10/27/cctv-reports-starbucks-prices-higher-in-china/

Author:Nikola Nedev

As a person who was born and raised in China, when I walked into a Starbucks in Canada for the first time, I could tell that Starbucks in China has a much more steep mark up. However, although I feel the pain of paying much more for the same stuff, I do believe this price difference is quite reasonable.

In China, Starbucks has a very small target market – the well-educated emerging middle class. Most Chinese people are not big fans of coffee, especially the older generations. Only the younger people with a relatively higher income plus an open mind in major cities would drink coffee regularly.

Considering this target market is only a small portion of the most populated country in the world, Starbucks also need to filter out the excessive amount of customers to maintain a nice environment. No one wants to stay in a crowded and noisy coffee shop with ultra slow internet service.

While I can see the reasons behind its jacked-up price, I do think it is unfair to make Chinese consumers pay more. In fact, many big brands have got a higher margin in China than in their western markets. Even if raw materials are cheaper in China or the goods are made in China, Chinese consumers are still suffering with the extra cost to improve life quality. This will inevitably become a social issue that our government will need to solve some day.