China Doesn't Appreciate Starbucks' Prices

This week, China decided to let Starbucks know their coffee is not appreciated. CCTV, China Central Television, a government controlled broadcaster, targeted the chain in a segment. According to “Starbucks caught in China’s crosshairs over posh prices” by Le Li of NBCnews, “[the report] said the price of a tall latte in Beijing is 27 Yuan or $4.43. That’s higher than in London, Chicago or Mumbai where the same drinks costs $4.00, $3.26 and $2.40 respectively”. The article quotes a Starbucks China spokesperson as saying “each Starbucks market is unique” and thus isn’t comparable. It wasn’t clear in the article if CCTV was aware that Starbucks prices also vary in U.S. markets – recently I purchased a Tall Caramel Macchiato for about $4. My Macchiato came from a Starbucks in the financial district of Providence, RI and probably would have been different in price had I went to a different location. While I didn’t appreciate the price compared to my preferred cheaper Dunkin' Donuts , I have always understood that Starbucks is a little more than the average coffee. Maybe CCTV broadcasters didn’t spend much time doing an extensive study into price variances between countries, cities, and intranational regions.

I digress from the bigger picture…

While the government and its mouthpiece may not find any joy in a $4 latte, the consumers of Starbucks China are avid drinkers of this expensive product. Shaun Rein, a managing director of a strategic market intelligence firm in China told NBCnews that “Starbucks is a luxury product in China… this is a lifestyle experience. Its main customers in China are women in their 20s who see it as a fashionable place to go…. If it’s too cheap, consumers will doubt its quality”. The article suggested the CCTV segment probably further marketed Starbucks as a luxury, continuing its popularity amongst the elite and luxurious wannabes. There you have it: Starbucks vs. the government controlled CCTV vs. people who actually love a $4 latte.  While I might only partake in Starbucks for some occasional fancy taste bud action, my drinking counterparts in China will maintain their high life images posing next to a posh hot cup of latte.