The profiteering price of Starbucks China is nearly 10 times the cost of materials.

Starbucks has said its pricing is based on a combination of operating costs such as raw materials and equipment, infrastructure investment, logistics and transportation, employee compensation and benefits, rent, exchange rates and import duties. Compared with the United States, the raw material cost of Starbucks coffee in China has increased the logistics cost and tariff cost of shipping from the United States to China, which has had a certain impact on the high price in China.

In terms of material costs, Wang Zhendong, president of the Coffee Industry Association of the Shanghai Food Association, said that coffee beans are shipped to the United States for baking after global international procurement, and then the cooked coffee beans are shipped everywhere, so, compared with the United States, Chinese coffee beans have to increase logistics costs from the United States to China and customs duties (about 15%). Even so, it is converted to each cup of coffee. The increase in the cost of coffee beans is only a few cents.

Wang Zhendong estimates that a medium cup of American coffee priced at 25 yuan will cost about 20 grams of coffee beans and a disposable paper cup. According to the current market price of 100 yuan per kilogram of high-quality cooked coffee beans, 20 grams of coffee beans cost 2 yuan, and disposable paper cups cost about 0.6 yuan. The material cost of such a cup of Starbucks American coffee is 2.6 yuan, but the price is nearly 10 times the material cost.

In terms of operating costs, it is mainly reflected in labor costs and rental costs. As we all know, the per capita income gap between China and the United States is huge. According to the per capita GDP data of various countries and regions in the world released by IMF (International Monetary Fund) in 2013, the per capita GDP of China is only 1/9 of that of the United States. The huge income gap directly reflects that the labor cost in China is much lower than that in the United States.

In this regard, Starbucks explained that compared with the US market, the Chinese market is still in the early stage of development, there is a lot of investment in infrastructure construction at this stage, and the number of stores in China is much smaller than that in the US market, that is, the overall scale is relatively small, making some costs relatively high, such as logistics, warehousing and so on. But Starbucks declined to provide specific cost figures.

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