Korean media: Starbucks is suffering from a serious "China shock wave" for three main reasons.

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Affected by the slowdown of China's economic growth, the upsurge of anti-American sentiment among the Chinese people and the improvement of the strength of Chinese local enterprises, the development of US enterprises in China is worrying.

Sales of Starbucks, an American multinational coffee chain, declined in China for the first time in the third quarter of 2018 (Picture Source: VCG)

According to a report in Asia Daily on January 17, 2019, Goldman Sachs recently warned that "Apple Inc." next is Starbucks.

Reported that, such as Apple, Starbucks and other large multinational American enterprises are suffering from a serious "China shock wave", mainly for the following three reasons.

China's economic growth slows down

According to the report, the negative impact of the Sino-US trade war on China's real economy is gradually emerging, and many voices have expressed concern about China's economic slowdown. China's economy grew by about 6.5% in 2018, the lowest since 1990. The slowdown in economic growth has also had a negative impact on the consumer psychology of the Chinese people. China's consumption increased by about 8.1% in 2018, the lowest level in 15 years since May 2003.

Sino-US trade war leads to an upsurge of anti-American sentiment

Recently, the US CNBC reported that Chinese consumers are becoming more and more resistant to US companies because of the Sino-US trade war, so US companies will only suffer more and more losses. In a survey of 2000 Chinese consumers, 54 per cent of respondents said they would not buy US products if a trade war broke out between China and the US, the Financial Times reported in July 2018.

The improvement of the strength of China's local enterprises

In fact, there are many local companies in China that are developing rapidly and are gradually catching up with American companies, the report said. Take Luckin Coffee, a local coffee brand, as an example. Since opening its first store in January 2018, there have been 2000 rising coffee outlets in China by the end of 2018. After Starbucks entered China in 1999, it opened only 3600 stores in about 150 cities in China in more than 20 years. Lucky's rapid development poses a great threat to Starbucks.

In response, the head of Bain&Company, a US management consultancy, has said that "it is a trend for US companies to succeed in China by defeating not only traditional competitors, but also local companies that are faster and more innovative than they can imagine."

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