Starbucks aims to spread its influence across China
The march into China of the Starbucks chain of coffee houses has been given fresh impetus over the past week with the American corporation announcing it is not only planning to triple the number of outlets it has in the country, it is going to tempt the Chinese consumer with a whole new range of products.
Starbucks claims it will have 1,500 outlets across 70 cities in China by the end of 2015 -- up from the estimated 500 there now -- and it will soon be rolling out a line of espresso machines for sale at its stores, while also introducing its low calorie “Refreshers” beverage and lines from the Evolution Fresh fruit juice range it purchased last November. The expansion will make China the company’s second-largest market in the world outside the United States.
History, of course, has always portrayed China as a nation of tea drinkers but the past decade has seen a major shift in tastes. Along with the spread of Starbucks, the British outlet Costa Coffee last year said it aimed to have 250 stores across the country within three years, up from the 50 odd that can now be found in Beijing and Shanghai combined.
Other major players such as the Hong Kong-based Pacific Coffee (50 shops opened, plans for 1,000) and Taiwan’s SPR Coffee (87 outlets) have tapped in to China’s growing appetite for coffee while the local industry is still represented by small-scale outlets like Beijing’s Jackie Chan’s Café. And while in general Chinese coffee shops serve the same blends found the whole world over, there have been some adaptations to suits specific tastes.
Last year, for example, Pacific Coffee added the “Er Wotou chillino" to its menu – an iced coffee mixed with the powerful and popular Chinese Er Wotou liquor.
Coffee drinking has been embraced by China’s growing middle class, according to Zou Deqiang, a professor studying consumer behavior at Fudan University, who believes there is more to the act of buying a cup than just satisfying the need for a pick-me-up.
"In China, Starbucks is not just coffee anymore," he told the China Daily. "It represents a Western lifestyle. Some people in China want to live like people live in the developed countries so, to some extent, drinking a cup of coffee that people in the US drink helps them fulfill that dream."
Starbucks recently raised eyebrows in China when it announced it was raising prices by one or two yuan (0.12 or 0.24 euro) per cup. The price rise means that a 16-ounce “grande” now costs 30 yuan (3.60 euro) which might not sound like much until you equate that to a cost of 10,950 yuan (1,330 euro) per year and consider that China’s per capita GDP last year was 28,000 yuan (3,390 euro), according to the World Bank.
But while the coffee houses are springing up across China, statistics show the beverage is still far from being as popular as it is elsewhere in the world – and even elsewhere in Asia.
A report last year from China Coffee Industry Association claimed Chinese on average only consumed three cups of coffee per year, compared to the average in South Korea of 140 cups and the 360 cups your average Japanese coffee lover downs over 12 months. Globally, meanwhile, the average is 240 cups of the hot stuff downed every year.
MS
