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The topic "Starbucks China says it will not engage in price war" has attracted attention on social media.

Talking about the "coffee price war", Starbucks China Co-CEO Liu Wenjuan said, "In a competitive environment with frequent promotions, we remain highly restrained and avoid price wars. At the same time, we have adopted a targeted and precise pricing strategy to create new sales growth and cultivate customers' consumption habits, which is consistent with our high-end positioning."

On July 31, Starbucks China announced its third-quarter financial report for fiscal year 2024 ending June 30, 2024. Data showed that Starbucks China's net income in the third quarter was US$733.8 million, a 5% increase from the previous quarter (excluding the impact of exchange rate changes).

Cooperate with Hilton and co-brand Yonex

In the past two years, the coffee and tea market has become more competitive, and cross-border collaboration has become a standard for tea brands to innovate and attract consumers. The popularity of "Jiangxiang Latte" not only helped Luckin Coffee break through the circle, but also set off a collaboration craze among tea and coffee brands, capturing a large number of young people and ACG fans.

Recently, Starbucks China announced that it will join hands with the well-known badminton brand YONEX to launch the world's first Starbucks and YONEX limited edition co-branded racket and a series of trendy activities.

According to 21st Century Business Herald, on June 20, Starbucks China announced changes to its membership system, connecting with Hilton in terms of membership ecosystem. Starbucks China's strategy is not to lower prices and to attract customers to spend more money, which targets the middle-class and above consumer market based on Hilton's high customer unit price.

At present, the "river and lake competition" in China's coffee market is becoming increasingly fierce. Faced with the increasingly fierce "price war", Starbucks, which has always emphasized that it "has no intention of participating in price wars", is also facing performance pressure in the Chinese market. Under the new competitive situation, how to seek innovation to retain consumers has become a question for Starbucks China.

Betting on the sinking market

According to a report by 21st Century Business Herald in May, Starbucks' 90-day active membership exceeded 21 million, reaching an all-time high, and the total number of members exceeded 127 million.

But this still cannot change the downward trend of Starbucks' revenue in China, and the company has placed its focus on increasing revenue in the lower-tier markets.

"Given the strong economic benefits of new stores in lower-tier markets, we will further expand new stores in lower-tier markets, especially in new county-level cities," said Starbucks CEO Nathhan.

Starbucks China Chairman and CEO Jingying Wang also revealed in the second quarter earnings call that Starbucks has covered nearly 900 of the nearly 3,000 cities at the county level and above in China.

It is reported that Starbucks China currently has 7,306 stores in more than 900 county-level markets.

This article is compiled from Beijing Business Daily, National Business Daily, and 21st Century Business Herald (reporters: He Hongyuan, Zhong Yulu)