Western retail brands in China
#31
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Starbucks' success in China isn't solely due to its coffee, which, considering the price point, isn't particularly exceptional. Rather, what appeals to the Chinese market is the concept and ideology of a Western, relaxed, and calm work lifestyle. This includes the idea of working on a MacBook in Starbucks, perceived as a premium way of life. This approach, rather than the coffee itself, is what has enabled Starbucks to being so successful in the past.
Finally, I want to reiterate the branding value of its megastores, including the largest Starbucks in the world. Costa, Tim's, or Luckin simply don't have the means to throw away money in this manner.
#32
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When Starbucks first entered the market, it locked in lease terms that guaranteed it would be the only coffee shop in building X. Therefore, even if Tim's manages to open 1000 stores over the next two years, few will have these prime locations. Sure, Starbucks's market share might tumble from 35% to 30% as a result, but it will still be 6x larger than #2 on the list. Furthermore, if you want to have a business meeting in the JA Kerry Center outside of your client's office, Starbucks is the logical choice, even if you dislike coffee...though I prefer Pie Bird myself.
Finally, I want to reiterate the branding value of its megastores, including the largest Starbucks in the world. Costa, Tim's, or Luckin simply don't have the means to throw away money in this manner.
Finally, I want to reiterate the branding value of its megastores, including the largest Starbucks in the world. Costa, Tim's, or Luckin simply don't have the means to throw away money in this manner.
#33
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You obviously know a lot more about this business than me and pretty much everyone else in this forum, but I can personally state that those Starbucks meetings are far more common for me that at competitors. I don't really care about the product quality or the price; it's more about convenience....and, I'm pretty sure you would never have a business meeting at Tim's.
I'm also curious to hear your opinion on the brand building value of megastores, that presumably lose money as standalone business units. This is a tool that Starbucks uses, but the others don't.
#34
Join Date: Jan 2005
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Good discussion! Most markets in Asia are growing for Starbucks through new, smaller stores with tighter seating. To me, the environment is much less special but it allows them to open stores in locations where they could not previously.
I am not sure smaller stores would work in China because the premium Starbucks charges conflicts with the experience and image created by these small stores. But I don't park myself in a coffee shop for 90-120 minutes and, therefore, am definitely not their target customer. It will be interesting to see what strategy they deploy in China going forward.
moondog I found your comment on having business meetings in Starbucks interesting. It reminded me I had one earlier this year in Taiwan in a 7-11 cafe! Chosen for the convenience of location and lack of suitable alternatives. Starbucks never occurred to us for whatever reason!
I am not sure smaller stores would work in China because the premium Starbucks charges conflicts with the experience and image created by these small stores. But I don't park myself in a coffee shop for 90-120 minutes and, therefore, am definitely not their target customer. It will be interesting to see what strategy they deploy in China going forward.
moondog I found your comment on having business meetings in Starbucks interesting. It reminded me I had one earlier this year in Taiwan in a 7-11 cafe! Chosen for the convenience of location and lack of suitable alternatives. Starbucks never occurred to us for whatever reason!
#36
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Yeah, much of the fast food items we're used to from the US, are....<ahem> and acquired taste.At KFC I can only [comfortably] eat the spicy chicken sandwich...the 'beef' ones are super weird tasting.
#37
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Attempting to cater to local tastes was KFC's MO from day one, whereas McDonald's was quite diligent about standardization for its core products (e.g. Big Mac, fries, basic burgers). IME, these are still pretty much the same in China and the US, but the China menu hasn't really followed the US trend on the bigger, even bigger, and bigger still front.
#38
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The McDo in France is wayyyy better than that in the US and very popular. Not cheap, but when I visit the US and stop by the McDo there it's always "oh yeah.......it's kinda gross here".
#39
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I agree that many of the localized products for the France market are tastier than Big Macs, but you need to compare Big Macs against other Big Macs to be objective (i.e. apples to apples).