Five reasons Starbucks is successful in China

Five reasons Starbucks is successful in China. If any company should have failed in China, it was Starbucks. China has thousands of years of tea drinking history and a strong tea culture. No one ever thought that Chinese people would drink coffee instead of tea.

Yet Starbucks has managed to open more than 570 stores in 48 Chinese cities since its arrival 20 years ago. Building on this momentum, Starbucks plans to have 1,500 stores in China by 2015. What is the Seattle-based coffee company doing right in China? Here are five successful Starbucks lessons.

stone dreams

When Starbucks entered China in 1999, many doubted it would succeed. Traditionally, Chinese people love tea, so Starbucks seems unlikely to break into this market.

But Starbucks didn't let that doubt get in the way. A thoughtful market survey shows that the rise of China's middle class provides Starbucks with an opportunity to introduce the Western coffee experience to China, where people can chat with friends while sipping their favorite drinks.

Starbucks really created that demand. Starbucks coffee shops can now be found on almost every main street in China's coastal cities. Even my father, who lives in China and is 90 years old, tells me that he drinks coffee after meals instead of tea to aid digestion. Starbucks has revolutionized the way Chinese people think about coffee.

accurate positioning

After deciding to enter China, Starbucks adopted a shrewd market-entry strategy. Instead of making Chinese feel threatened by their tea culture, the campaign is focused on choosing places with high visibility and high traffic to build brand image.

Starbucks then capitalized on Chinese consumers 'tea culture by introducing drinks made with locally popular ingredients such as green tea. This strategy effectively turns potential obstacles into advantages. Chinese consumers quickly fell in love with Starbucks coffee, which is the basic reason for Starbucks 'success in China.

One of Starbucks 'key marketing strategies is to provide unique experiences to customers. Elegant interiors, comfortable lounge chairs and pleasant music not only set Starbucks apart from its competitors, but also appeal strongly to younger generations who see Western coffee culture as a symbol of modern lifestyle. Many people go to Starbucks not just for a glass of Frappuccino, but for the Starbucks experience that makes them feel cool and hip.

Starbucks has thus established itself as a desirable brand that can sell at premium prices.

brand internationalization

Starbucks knows the value of its international brand and has taken several steps to maintain brand integrity, one of the best being to send their best baristas in established markets to new markets and train new employees. These baristas act as brand ambassadors, helping to foster Starbucks culture in the new stores and ensuring that each store's service meets their international standards.

Western brands in general have a reputation for high quality products and services, and they have a competitive advantage over Chinese companies in positioning themselves as upscale brands. However, too many western brands are cutting prices for market share, a failed strategy because they can never "crowd out" local competitors through price wars, says Xiaoshan Lei, founder and managing director of China Market Research Group.

International branding does not mean "international product" or "international platform". E-harbors make this mistake. Starbucks has highly localized its beverages to cater to Chinese consumers. Starbucks has done a lot of analysis of Chinese consumer tastes, creatively blending eastern and western tastes. Starbucks even allows each store the flexibility to choose from its diverse beverage mix to suit local consumer tastes.

For international brands to succeed in China, they must adapt their business to the local market. Starbucks does just that.

Cooperative localization

China is not a homogeneous market, but there are many Chinas. The culture of northern China is quite different from that of eastern China. Inland spending power cannot be compared with coastal cities. To address this complexity of the Chinese market, Starbucks has selected three regional partners as part of its expansion plan.

In the north, Starbucks has formed a joint venture with Beijing Meida Coffee Company. In the east, Starbucks has partnered with Taiwan Unification Enterprises. In the south, Starbucks 'partner is Maxim Foods Hong Kong Ltd. Each partner has different strengths and local knowledge that helps Starbucks understand the tastes and preferences of local Chinese consumers.

Working with the right partners can effectively understand local consumers and enable rapid growth without a long and tortuous learning curve.

long-term efforts

China is not a market that can be opened easily and requires long-term efforts. An important strategy is to invest in employees. When I visited a Starbucks in Shanghai in 2007, I was impressed by the warm greetings from Chinese baristas, which distinguished Starbucks from imitators. Starbucks has done an excellent job recruiting and training employees. This is a win-win strategy because employees are at the heart of delivering the Starbucks experience to customers. They are the best corporate marketing ambassadors.