Starbucks has been in the Chinese market for 22 years and has been regarded as part of a quality lifestyle by elite petty bourgeoisie. China has also become Starbucks' largest and fastest-growing market in the world.
This time, Starbucks has overturned again, why did Starbucks, a "gentleman" in a suit and leather shoes, also start to "steal and slip"? Will its "Waterloo" become a new opportunity for many domestic coffee brands?
Please drink this expired Starbucks
On December 13, some media reporters found many food safety problems in the undercover investigation of two Starbucks stores in Wuxi City, such as continuing to use the ingredients after expiration, making a variety of best-selling drinks for sale; supervisors and clerks "teaching by example" to tamper with the shelf life, some ingredients were "extended" for a week; and cakes that promised to "not stay overnight after opening" were secretly put on the shelves the next day...
The above-mentioned reporters undercover found that the above chaos is not accidental, driven by interests and regulatory negligence, some stores follow the "unspoken rules" of food safety. The clerk even said that this practice seems to have become a "routine operation": "These stores in Wuxi are actually like this, they are all similar, the above is like this, generation after generation, the master and the apprentice are brought this way, it does not matter." ”
Late on the night of December 13, Starbucks China issued a statement confirming that "the partners (employees) of the two stores have indeed violated operational practices" and reiterated that they are "based on the highest industry standards."
But in fact, this is not the first time Starbucks has had a food safety problem.
On November 24, Starbucks Coffee (Shenzhen) Co., Ltd. Yantian Yihaicheng No. 2 Branch was warned by the Shenzhen Municipal Market Supervision and Administration Bureau for food violations, specifically failing to clean up food that exceeded the shelf life (Taiwanese mooncakes) in a timely manner. Shanghai Starbucks Coffee Operation Co., Ltd., an affiliate of the Starbucks brand, has been subject to administrative penalties many times in recent years.
Regarding the quality problem of Starbucks in Wuxi, the author has three questions:
Is this an isolated phenomenon or a universal phenomenon?
In the public perception, Starbucks, as an international head enterprise, should have a set of very standard and strict management system. The two Starbucks stores in Wuxi have actually been exposed to the most basic food quality problems, so it is necessary to torture all Starbucks stores in the whole of China, whether it is universal?
Does Starbucks management know?
As the management of Starbucks, are you aware of such a casual act of re-listing expired products and arbitrarily modifying the shelf life? Whether to turn a blind eye or completely unaware, to put a question mark. Is such a "cost-saving" behavior the unspoken rule of the entire Starbucks system?
How can the people involved and management be held accountable, and how can they be held accountable to consumers?
If it were not for the reporter's secret visit, how many consumers would have drunk expired coffee and tasted the cake that had been opened last night? What kind of responsibilities should Starbucks have to consumers?
Starbucks anxiety
According to enterprise investigation data, the total amount of financing disclosures related to the coffee industry in China in the first ten months of 2021 is close to 6 billion yuan, and some popular brands even got 2 or 3 rounds of financing in the first half of the year, such as Yingji Coffee, Manner, M Stand, etc. In addition, there are some old brands that are sprinting through the chain of hundreds of stores, advancing into shopping malls, and entering the "territory" of Starbucks.
At present, statistics show that China's domestic coffee drinking consumers have reached 330 million people, and the size of the coffee consumption market is expected to exceed 100 billion yuan in 2021. Even during the epidemic, it is expected that the freshly ground coffee market will exceed 60 billion yuan in 2021 and maintain a rapid growth rate of 20% annualized.
On the coffee track, all parties involved are catering to consumers with their own unique business models, scene experiences and different styles of positioning. In developed first- and second-tier cities, offline coffee experience stores have sprung up, and online coffee brands have also shown a diversified scene of miscellaneous peanut trees.
With the increase in the popularity of coffee, consumers have strict requirements for the all-round experience of coffee from the inside out, and the new brand will also take taste and service as the focus of attack, trying to create differentiation through category innovation, design aesthetics, accessibility of online and offline integration, the association between brand and user emotions, architectural space, personalized service, and ultimate experience.
Starbucks, attacked by the crowd.
In the second quarter of this year, Starbucks added a net of 162 stores in the Chinese market, and the total number of stores at the end of the quarter has reached 5135 stores, and the total number of stores operating is expected to reach more than 6,000 by the end of the third quarter of 2022.
While Starbucks China stores are still expanding rapidly, Starbucks China's revenue in the past three quarters was $5.9 billion, $5.6 billion and $5.9 billion, respectively, with little change in sequential growth.
In August, Starbucks China announced a new personnel appointment, with Former China Chairman and CEO Belinda Wong as Chairman and No Longer SERVING AS CEO; Leo Tsoi was promoted to Starbucks Global Executive Vice President and Starbucks China CHIEF Executive Officer.
Wang Jingying wrote in a letter to employees: "Our story has just written a beginning. "But over the years, starbucks has been written at this beginning, which has not been well written. This time, the quality problem of Starbucks has surprised everyone, and the media has questioned "why the head enterprise of the industry's 'thick eyebrows and big eyes' also do this three indiscriminate things?" ”
In today's China, coffee obviously has a huge market, but the problem is that local coffee brands need more stable and reliable quality, better service experience, convenient, enthusiastic, more competitive and cost-effective. Starbucks, which steals and slips, should be more cautious and responsible for subsequent operations.
The third space, old
Among China's local coffee brands, the first to challenge Starbucks is "Luckin". Ruixing drove the chariot of the Internet, armed with a spear, and from the beginning he was fierce and hard with Starbucks. Unfortunately, Luckin himself did not argue.
But time has passed, and Luckin seems to be growing quietly again. According to the third quarterly report, Luckin achieved operating income of 2.3502 billion yuan, an increase of 105.6% over the same period last year of 1.143 billion yuan; the net loss was 23.5 million yuan, compared with the net loss of 1.71 billion yuan in the same period last year, the loss narrowed by 98.6%, and it was further from turning a loss into a profit.
In addition, many emerging coffee brands that have risen offline are challenging Starbucks' third-space concept with more vivid and lively creativity and diversified scene experiences.
As we all know, Starbucks does not focus on the coffee product itself, but sells a "third space". The so-called third space was proposed by Starbucks founder Schultz, which means that in addition to the work space and family space, Starbucks is another comfortable third space for leisure and relaxation.
With its unique spatial culture, Starbucks has dominated the Chinese coffee market for 22 years, which is very accurately adapted to the additional needs of the business people for the added value of coffee. However, with the passage of time, its "third space" has been challenged.
First, in terms of site selection, it must be in the most core position of the entire city's business. If the location is remote, who wants to rush to a store where transportation is not convenient to immerse themselves in the "third space"?
Second, the store must fully consider the problem of business area, and must have enough space for people to rest. The requirements for opening such stores are completely different from the Internet coffee that has risen in the past two years, such as some of Luckin's offline stores do not even have customer seats.
Third, and most importantly, users are very prone to aesthetic fatigue for the space experience. No matter what kind of user, always like to constantly try new things, the same space design style, when the user experience N times will feel bored, once there are different styles of cafes, users will basically be willing to try the early.
The Starbucks brand has inevitably tended to age. In the understanding of young people, Starbucks is serious and high-end, but it lacks affinity and vitality. To China's young consumers, Starbucks is like a serious old-school gentleman, boring and unlovable.
Starbucks' youthful efforts
Starbucks has fully realized that under the wave of Internet culture, young people are always pursuing different endogenous elements, such as affinity, entertainment, interactivity and value resonance. Over the years, it's clear that Starbucks is constantly changing itself.
First, Starbucks has also begun to actively embrace the Internet. In 2019, Starbucks launched a "brown fast" concept store with digitalization as the core in China, focusing on "online point, pick up at the store". In 2020, "Brown Express" launched Alipay, Taobao, Koubei, AutoNavi map and other platforms. In March 2021, Starbucks China Brown Express service officially landed on the WeChat Mini Program.
Second, develop more high-end stores. Howard Schultz, founder and former CEO of Starbucks, has proposed opening 1,000 Reserve stores and 20 to 30 reserve bakery stores around the world.
Third, Starbucks continues to strive to improve its freshness by creating peripheral cultural and creative products. In 2019, Starbucks launched a cat's claw cup, which was fried to five or six hundred on Taobao. Since then, Starbucks has not given up the continuous renovation in this field, and various unique cups, backpacks, etc. are expensive.
Starbucks's next development in China depends first of all on its respect and sincerity for Chinese consumers, and how to deal with the mushrooming of local coffee brands, how to continue to innovate and embrace Internet culture, can not be ignored.