Starbucks China Has A Problem, Customers Won’t Leave And Often Don’t Buy Anything
Starbucks expects the Chinese market to become its second biggest region by 2014, pushing Canada back to No. 3., there is just one big problem the company is currently facing, customers in China love the company’s locations so much that they are often refusing to leave and in some cases are visiting the stores just to sit around without buying anything.
According to Reuters Chinese nationals don’t go into Starbucks with the same to-go mentality as Americans which means many of them sit around Starbucks stores for hours, chatting with friends, reading books and otherwise just loitering. While Americans also spend hours in Starbucks locations they tend not to bring in their own food and then refuse to purchase an overpriced cup of coffee, but that is apparently a regular practice in China.
Buying a cup of coffee from a Starbucks location in China requires a hefty chunk of change, in fact the average worker would spend 1.3 to 1.9 hours at work just to pay for the cup of coffee.
While Starbucks China may have a loitering problem the company is still witnessing profits and plenty of growth potential with 570 stores already opened and with revenues of $358 million in 2010. While China still has a long way to go in catching up to the US chains $8 billion a year revenues it does have one advantage overseas, the company charges US prices for coffee but pays lower labor costs to Chinese workers.
If Chinese citizens become as addicted to Starbucks as they have to cigarettes the sky is the limit.
Starbucks has even opened a coffee shop inside the forbidden city which has drawn plenty of controversy. Here’s a video of the fight against the chains forbidden city launch: