A recent survey of the price of Starbucks unveil atruth that the company charge 26% higher in Beijing (4.81$) compared withthe same product they provided in London (3.82$). As a global company, Starbucks get their ingredient from South America. The transportation fee to deliver ingredient from South America to China and Britain are relatively no difference. On the other hand, the total expenditure to hire employees in China is no higher than those in Britain. Then why the price in China is higher?

The reason behind this phenomenon, I believe is the value proposition. For European and American costumers, coffee is just commodity, in other words the target market are literally every citizenship. However, about 10 years ago, when Starbucks first come into China’s market, its relative high price means they positioning their brand for high-income citizens. Compared with other kinds of daily drinks in China, such as tea and other coffee brands, the biggest point of difference of Starbucks coffee is its high quality and the western lifestyle they stand for. So, as a result Starbucks set a high price for China’s consumer in order to meet their perception of this brand. This may explain the high price of Starbucks in China.

http://www.theatlantic.com/china//2013/09/why-is-starbucks-so-expensive-in-china/279394/