Converting The Masses:Starbucks In China
It sounds like Mission Impossible：Sell coffee to China’s tea drinkers．Starbucks’so lution is to select high－profile locations on the busiest streets，where stores are sure to se duce the see－and－be－seen set．
As Starbucks launches an aggressive expansion in China，a coffee frontier steeped in nearly 5,000 years of tea．The goal：to build hip hang－outs that tap into a new taste for China’s emerging middle class．
Though Starbucks is still hardly known in China，with 69 stores，it’s taking a big bet．The Seattle－based company announced recently that it would increase its stake in its Shanghai and Taiwan joint venture with President Coffee from 5% to 50%．Elsewhere，Starbucks opens stores in Guangzhou，its third mainland Chinese city，this year，and aims to open hundreds more in the coming two years．
Starbucks China doesn’t plan any advertising，promotions，or other marketing strategies，aside from sponsoring an on－line coffee club and the occasional office－tower coffee tasting．In－stead，the company is counting on selecting such high－visibility，high－traffic cafe locations that they market themselves．Its main advertising medium is the store itself．
But in fast－changing Chinese cities，finding locations that will embody the right lifestyle is more akin to gambling than science．The computerized mapping databases that the company uses to test a potential street corner in the United States would be little help in Chinese cities．In the U．S．，if you see a mall，it will probably still be there in two years．While a year passesby in a Chinese location，and you almost won’t know your way around there any more．Yet Starbucks faces an uphill battle．Local media reported that 70% of people they surveyed would rather not see the chain in Beijing’s Forbidden City．And even for middle－class Chinese，Starbucks is a barely affordable luxury．While retailers say a top marketing weapon in urban Chi na is to charge more for public consumption．That’s because Chinese customers have different priorities than their American yuppie counterparts．Guys 40 years old are not coffee drinkers，but if the environment is good and the coffee is not bad，they’ll come back．The store layout，artwork and food options? make Starbucks more friendly to Chinese eyes，but coffee remains the core offering and people don’t go there for the coffee．They go there to present themselves as modern Chinese in a public setting． |