Starbucks Cuts Tea-Based Drinks Prices in China

Once a status symbol, US coffee chain has to reinvent itself to woo Chinese consumers

- Michelle Ng

BEIJING - "If I'm not at Starbucks, I'd be on the way to Starbucks."

This was a common saying among netizens in China more than a decade ago, when patronizing the American coffee chain was associated with being trendy and cosmopolitan.

But how times have changed for Starbucks, which has lost its social cachet as well as its status as the largest coffee chain in China to Chinese rival Luckin.

Now, in a rare move, the US coffee giant — which has long defended its premium positioning in China — has cut prices for its tea-based beverages this summer.

About a dozen of Starbucks' non-coffee drinks, which include Frappuccinos, iced shaken teas and tea lattes, now cost as little as 23 yuan (S$4.10) each after an average 5 yuan discount, in a promotion effective from June 10 at its stores across China.

Starbucks promoted its new drink prices on its official social media channels in China, branding it as a "summer special price". Prices of its coffee drinks remain unchanged, ranging from 30 yuan for an Americano to 41 yuan for a cheese latte.

In recent years, Starbucks has been losing market share to major Chinese coffee chains such as Luckin Coffee and Cotti Coffee, which offer cheaper drinks for customers to grab on the go.

Its promotion comes as the Chinese tighten belts amid a weakened economy, protracted property slump and difficult job market.

While Starbucks had previously said it would not engage in price wars, it has introduced smaller drink sizes and coupons to appeal to a wider consumer base in its second-biggest market after the US.