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After hooking China on coffee, Starbucks ramps up consumer strategy

Now that the chain has Chinese consumers hooked on coffee, it is attempting to become part of local consumer culture, analysts say

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A woman checks her phone next to a Starbucks cart in Beijing. Photo: AFP
Chelsea Yang

When Anne walked into a Starbucks branch in Seattle more than a decade ago, she knew exactly what to expect: a latte, a comfortable chair and a place to work.

Now, after living in the technology hub of Hangzhou, the capital of the eastern province of Zhejiang, and working as an English teacher for three years, the 34-year-old American still visits Starbucks regularly, but says the local Starbucks stores are increasingly different from the ones she remembers back home.

“It’s not really just a coffee shop any more,” she said. “Sometimes it feels more like a community centre.”

While Starbucks in the United States often serves as a pit stop for takeaway coffee or for a convenient break between work meetings, its China outlets are increasingly positioning themselves as venues for social connection and cultural experiences.
The trend seems to go beyond localisation, and some analysts attribute it to intensifying competition in China’s consumer market and the growing need for foreign brands to become part of local consumer culture, rather than simply selling products.

“China’s coffee market has evolved from an education stage to a competition stage. Consumers today are no longer choosing Starbucks simply because it is a foreign coffee brand,” said Jason Yu, the general manager of CTR Market Research.

“They are looking for brands that reflect their lifestyles, interests and cultural identity. That is pushing multinational brands to localise more deeply than before,” he added.

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