In the last three months of 2023, Starbucks generated revenue of 94$300 million, up 82%, driven by cost reduction and efficiency increase, net profit increased by two percent to 10$200 million. Starbucks China also saw double-digit growth in revenue and same-store revenue, but the quarterly average order value** was 9%.
In response to the weaker-than-expected global revenue and performance in the Chinese market, Starbucks said it was affected by three unexpected factors: the Middle East and the United States are affected by the situation in Gaza, and Chinese "consumers are more cautious" and "competition is intensifying".
Starbucks CEO Laxman Narasimhan said that China's growth was partly due to the low base under the impact of the epidemic in the previous year, and the decline in average order value was related to "product mix shifts and increased environment", and the overall recovery was slower than expected and the overall market weakness exacerbated the war.
In a later remarks, Wang Jingying, chairman of Starbucks China, added that the decline in unit prices is related to cautious consumers reducing their consumption of ** products and "targeted** investments", but in the end, it is all about keeping Starbucks as the leader and leader in China's high-end market.
The coffee market is still in its early stages, evolving, undergoing transformation, but not fully stratified, right? A large number of mass-market competitors who focus on rapid store expansion and low-price strategy ......Wang Jingying said, "We are facing an increasingly fierce environment. We don't want to get involved in the ** war. We focus on seizing high-quality but profitable, sustainably growing businesses. ”
As of the end of last year, Starbucks had 6,975 stores in China, distributed in about 857 cities (referring to county-level divisions), with a coverage rate of about 30%. At the earnings conference, Starbucks said that it will enter more lower-tier markets next, in addition to the strategy in China, which also includes more innovation and localization, deeper participation in social media, and the use of technology to improve efficiency, etc., "In China's high-end market, no one occupies a more advantageous position than Starbucks."
Now Starbucks China's mobile app has begun to issue ** coupons conditionally and intensively, usually after buying a few drinks at a time or punching in and doing tasks, you can cash them out. New products are also being released more intensively. According to the materials provided by Starbucks, 12 new products will be launched in the fourth quarter of 2023, including thick cups, red Fuji lattes, and frozen lattes for delivery channels. In addition, Starbucks has also started to bring goods on Douyin live broadcast, and sell discount coupons for single products in Meituan.
When other beverage brands that used to sell a single product for more than 30 yuan directly reduced the price or launched a single product below 10 yuan, Starbucks China tried to maintain the original ** system. According to a recent survey, the per capita daily income in China can only buy 6 cups of Starbucks latte (33 yuan for a large cup), which is slightly higher than that of Thailand, the Philippines, and India, and far lower than that of developed countries such as the United States, Europe, Japan and South Korea. In absolute terms, China's pricing is the highest in Asia, about 20% cheaper than that of the United States.
A brand consultant said that this is a hierarchical method of brand selection of consumers, that is, consumers who don't care**, or in business situations, can order directly, and those who are sensitive can also find deals by spending some time (but with fewer choices). China has a large consumer base and obvious income stratification, but one of Starbucks' key attractions for any group is its relatively high-end brand image, so pricing is an important anchor point, and the impression of "discount" should be minimized.
But at the moment of de-premium consumption, this is not an adventure. (Lin Guangying, Gong**).