The reasons for Starbucks' success in the Chinese market

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

However, since landing in China 20 years ago, Starbucks has successfully opened more than 570 stores in 48 Chinese cities. With this momentum, Starbucks plans to have 1500 stores in China by 2015. What did the Seattle-based coffee company do right in China? Here are five lessons from Starbucks' success.

Be different from others

When Starbucks entered China in 1999, many people suspected that Starbucks could not succeed. Traditionally, Chinese people like to drink tea, so it seems impossible for Starbucks to break into the market.

But Starbucks did not let this doubt stand in its way. The rise of the middle class in China has provided Starbucks with the opportunity to introduce the Western coffee experience to China, allowing people there to chat with friends and drink their favorite drinks, according to a thoughtful market survey.

Starbucks does create this demand. Today, Starbucks coffee shops can be found on almost every main street in China's coastal cities. My father, who lives in China, is 90 years old, and even he tells me that he drinks coffee instead of tea after dinner to help digestion. Starbucks has completely changed the minds of the Chinese and made them drink coffee.

Accurate positioning

After deciding to enter China, Starbucks adopted a shrewd market entry strategy. Its advertising campaign does not make the Chinese feel that their tea-drinking culture is threatened, but is committed to choosing places with high visibility and high flow of people to build a brand image.

Next, Starbucks took full advantage of the tea-drinking culture of Chinese consumers and launched beverages made from local 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' important marketing strategies is to provide customers with a unique experience. Elegant interiors, comfortable lounge chairs and melodious music not only distinguish Starbucks from its competitors, but also strongly attract the younger generation, who see Western coffee culture as a symbol of a modern way of life. Many people go to Starbucks not only to have a glass of Frappuccino, but also to feel the "Starbucks experience" that makes them feel cool and stylish.

As a result, Starbucks has made itself a desirable brand that can sell at a high price.

Brand internationalization

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

Generally speaking, Western brands have a good reputation for high quality products and services, and they have a competitive advantage over Chinese companies in building themselves into upscale brands. However, Shaun Rein, founder and managing director of China Market Research Group (China Market Research Group), points out that too many western brands are selling at reduced prices for market share, which is a failed strategy because they can never "crowd out" local competitors through a price war.

International brand does not mean "international product" or "international platform". E-Harbor (eBay) made such a mistake. Starbucks highly localizes its drinks to cater to the tastes of Chinese consumers. Starbucks has done a lot of analysis on the tastes of Chinese consumers and creatively blended the tastes of East and West. Starbucks even allows each branch to choose flexibly from its diverse beverage mix to suit local tastes.

For international brands, if they want to succeed in China, they must adapt their business to the local market. That's what Starbucks does.

Cooperative localization

China is not a homogeneous market, but there are many "Chinas". The culture of northern China is very different from that of the east. The consumption power of inland is not comparable to that of 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 is working with Taiwan's Uni-President. In the south, Starbucks' partner is Hong Kong Meixin Food Co., Ltd. Each partner has different advantages and local knowledge to help Starbucks understand the tastes and preferences of local Chinese consumers.

Working with the right partners can effectively understand local consumers and achieve rapid development without going through a long and tortuous learning curve.

Long-term efforts

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

Long-term effort also means patience. It takes time to cultivate the market and win customer loyalty. Companies that make long-term investments are sure to get a lot of returns.

If Starbucks can succeed in a market that is least likely to succeed, there is no reason why other companies, big or small, cannot succeed in China. Extraordinary thinking, good preparation, adopting the right strategy, catering to the local market and making long-term efforts are important steps to achieve this goal.

China Coffee Trading Network: www.gafei.com