In May of this year, Starbucks faced an unprecedented challenge that shocked the world.
On May 1, local time, Starbucks shares suddenly plunged nearly 18%, wiping out more than $15 billion in market value.
At the same time, Starbucks' store sales in China fell 11 percent year on year, far less than the expected decline of 1.64 percent.
In response to these chilling financial figures, many netizens bluntly asked: "Is Starbucks really in trouble in China?"
After all, China's coffee market has grown rapidly in recent years, and Starbucks' latest setback is entirely due to its development strategy gone wrong, running into competition from emerging brands such as Luckin and Cudi, which has hit the established coffee giant hard.
Starbucks, which traces its roots back to 1971, was founded by three Seattleites and later bought by a former marketing director in 1988, officially entering the modern coffee chain industry.
Therefore, Starbucks can be regarded as an old brand with a long history, while brands such as Rising and Cudi are new forces that have emerged in recent years, full of vitality and innovation.
Younger brands can often attract consumers with more flexible strategies and products that are more in line with current trends, and the price war of brands such as Luckin and Cudi has made traditional giants feel great pressure.
The price war between these two emerging brands has been self-evident, and they have attracted a large number of consumers with low prices and a large number of preferential activities.
After all, Cudi has a close relationship with the founding team of Luckin, and the development strategies of the two brands are also very similar: large-scale store construction and the implementation of preferential policies.
Their rivalry has pitted the two brands against each other in a fierce battle for market share.
And this competitive situation can not help but let the original watch Starbucks feel pressure.
However, Starbucks is not outdone, although it has always claimed not to participate in the price war, but began to launch a series of preferential activities, such as specified taste discounts, buy more discounts, etc., in order to seize market share.
While some have criticized Starbucks for being inconsistent in words and deeds, while announcing that it would not participate in a price war, Starbucks has claimed that this is to "promote the frequency of purchases by consumers," not a price war.
In fact, Starbucks' promotions are still relatively conservative compared to Luckin and Cudi's price wars, so Starbucks' insistence that it is not involved in the price war is not without merit.
The reason why Starbucks has such confidence is completely derived from its rich experience in the Chinese market and in-depth understanding of Chinese consumers.
The early development of Starbucks in the Chinese market was not smooth, Chinese people's eating habits dominated by tea, coffee did not receive much attention, and Starbucks' ready-to-drink model was difficult to adapt to Chinese culture.
However, Starbucks has always believed in the huge potential of the Chinese market and has made great progress in the Chinese market through heavy investment and development.
Starbucks has closed more than 600 stores in China, while opening more than 80 new stores in China, and has achieved considerable results.
Although Starbucks' recent financial figures have shown some signs of decline, this does not affect its long-term growth prospects in the Chinese market.
Starbucks remains committed to adapting to the changes in the Chinese market, introducing new products and promotions to maintain a competitive edge.
After all, Starbucks has a long enough history in the Chinese market that they know the key to success in the Chinese market, so they will take appropriate measures to meet the challenges and continue to grow steadily.
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