Starbucks and Asian Wanderlust

In a move that might bring either  feelings of delight or disgust to many, Starbucks has announced plans to open “thousands of stores” in China over the next few years. The move will see China (376 stores currently) leapfrog Japan (878 stores currently) to become their second largest market in the world behind the US, according to enigmatic Chief Exec Howard Schultz.

The aggressive expansion comes after his return to the company which has seen the Seattle coffee chain recover after a period of entropy, during which Schultz says the brand lost its ethos and philosophy.

Reasons for this slump were ubiquity to the point of saturation and a demise in the service culture and atmosphere which had created their initial success. In a brave move mocked by competitors at the time, the talismanic CEO ordered all stores to close for 3 hours for Barista training. It seems to have worked, or at least catalysed a recovery. To think about restoring the brand through a service rather than product lens might be a shrewd insight.

Of the move into China, Schultz says, “The thing I am most interested in when I go to China is whether or not local Chinese are buying Starbucks coffee and sitting in our stores.”

China is not just a nation of tea-lovers. It produces such myriad varieties of camellia sinensis which vary in flavour, ritual, and benefit, it’s interesting as to what Chinese would do in Starbucks. From my observation, people primarily enjoy the decor, surf the web and chat. Perhaps the taste of coffee isn’t the main point.

Coffee in China is explicitly foreign. Starbucks stands for foreign-ness. For many Chinese, going to Starbucks could represent joining an international community who do so already. Coffee is exotic and ‘Other,’ as opposed to the ‘Terroir’ of tea. Yunnan is the only Chinese region with coffee cultivation – that says it all really; Yunnan is exotic and foreign and ‘other’ inside the country. As an aside, it’s quite prescient how Starbucks etymology is based on a character from Herman Melville’s ‘Moby Dick’ – a novel where themes of wandering and otherness abound.

What will be interesting is to see how a brand image based on that  is affected when asserting ‘Chinese’ customs on the world becomes the main axel of Chinese contemporary culture – something we feel is beginning to happen. Not being ‘just’ a coffee brand is interesting.

Moreover, when you sell your coffee at such exorbitant costs, I’m sure local Chinese imagine they should get free wi-fi and a comfy seat to chat to their friends or relax at the very least.

In Japan, the brand has learnt lessons about the price of it’s coffee. A short term offer for receiving a 100 Yen refill if you bought another coffee earlier in the day has been so successful that they’ve extended the deal until August. That goes to show that offering expensive (and to any coffee connoisseur not the best quality) coffee isn’t enough to lure people in the long run.

Localisation of products has been another positive venture in Asia- Sakura steamed buns filled with red bean paste and the Sakura Steamer (a syrup infused milk for Cherry Blossom season) have worked well. It’s an inevitability that localising will gain traction and is a total necessity in China, but as the brand plans to move into India and Vietnam, one would hope to see more than an inauthentic Chai and cà phê sữa đá on offer.

Recently, Starbucks has been one of the first big brands to catch on to utilising social and location based apps on mobiles. They released a Foursquare badge that taps into customer loyalty – 5 checkins to become a barista. Though there is no immediate reward as of yet, this is surely soon to follow.

Overall, thinking about coffee as a precursor to a broader brand experience might be the best approach in breaking these markets, because as we’ve seen from Starbucks allure in the US and UK, the indulgent status kick of buying expensive coffee can only last for so long before your store becomes just a familiar green dot on the corner of the horizon…

What do you think?

Image Credit: ‘I love a good Starbucks invasion’ from a anti-Starbucks campaign in Miami Areyougeneric.org

…And we wouldn’t be able to write anything about Starbucks in China without including a classic ‘ Shanzhai version, would we now…

Main image credit: Flickr

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This entry was posted on Wednesday, April 21st, 2010 at 12:24 pm. It is filed under Asia, China, Food & Beverage and tagged with coffee, featured, shanzhai. You can follow any responses to this entry through the RSS 2.0 feed.