Seeking Alpha

Chinese media attacks Starbucks over prices

  • Starbucks (SBUX) has become the latest multinational consumer giant to come under fire in China over its practices, with the official China Central Television (CCTV) accusing the company of charging more in the country than elsewhere.
  • In a report, CCTV highlighted how a medium-size latte costs 27 yuan ($4.43) at Starbucks in Beijing, a third more than in Chicago. The company's Q2 profit margin was 32% in China-Asia Pacific, well above the 21% in the Americas and 2% percent in EMEA. CCTV's report adds to a critique by the official China Daily newspaper last week.
  • The attack on Starbucks follows similar scrutinization of Apple and Volkswagen.
Comments (14)
  • rasanders22
    , contributor
    Comments (579) | Send Message
     
    An item is only worth what people are willing to pay. If the people of China think $4.43 is too much for a drink, then they can take their business elsewhere.
    21 Oct 2013, 05:28 AM Reply Like
  • samuel_liu
    , contributor
    Comments (2798) | Send Message
     
    Unfortunately there are no decently priced coffees in Shanghai (gouging). Shanghainese consumers enjoy SBUX, I am not one of them though.
    21 Oct 2013, 07:37 AM Reply Like
  • Cannalyzer
    , contributor
    Comments (12) | Send Message
     
    I don't think you understand how China works. Expect to see a price reduction in the near future.
    21 Oct 2013, 07:46 AM Reply Like
  • samuel_liu
    , contributor
    Comments (2798) | Send Message
     
    I enjoyed Italian espressos for 6RMB/ and better quality Tw coffee for 10RMB in Beijing.
    21 Oct 2013, 08:22 AM Reply Like
  • rjj1960
    , contributor
    Comments (1370) | Send Message
     
    Not only is the coffee grossly over priced, it tastes horrible. Dunkin Donuts and Green Mountain are superior to them.
    21 Oct 2013, 05:57 AM Reply Like
  • june1234
    , contributor
    Comments (3066) | Send Message
     
    grande tall or venti skinny frappuccino aside you're basically paying $5 for a cup of coffee
    21 Oct 2013, 06:29 AM Reply Like
  • User 353732
    , contributor
    Comments (4975) | Send Message
     
    Chinese mercantilism is merging, as is inevitable, into jingoism and over anti-Americanism. No doubt part of the campaign to "de-Americanizse" the world.
    As the US Regime retreats geo-strategically, China, Russia and their vassals advance.
    21 Oct 2013, 06:54 AM Reply Like
  • MickJag
    , contributor
    Comments (7) | Send Message
     
    If the Chinese want some of the best from the U.S. then better pay the premium.
    21 Oct 2013, 07:03 AM Reply Like
  • rjj1960
    , contributor
    Comments (1370) | Send Message
     
    http://bit.ly/1bOwxh1 Excellent research related to SBUX
    21 Oct 2013, 07:06 AM Reply Like
  • 683
    , contributor
    Comments (50) | Send Message
     
    I agree with rassanders22. Anyway, what ever happened to making your own coffee at home?
    21 Oct 2013, 07:10 AM Reply Like
  • Tricky
    , contributor
    Comments (1588) | Send Message
     
    Indeed. And that's exactly what SBUX's CEO does -- makes his coffee at home (wait for it).... with a French press. He's in good company with yours truly ;-)
    21 Oct 2013, 08:36 AM Reply Like
  • al roman
    , contributor
    Comments (9274) | Send Message
     
    Change the name to Beijing star then it would be to cheap.
    21 Oct 2013, 07:27 AM Reply Like
  • Leaper229
    , contributor
    Comments (4) | Send Message
     
    only old or stupid ppl still watch/read and give a crap about any form of official media in china, especially CCTV. starbucks' customers in china are mostly the younger generation (based on my experiences most customers are under 40). yes its way overpriced in china but they dont rly care, CCTV wont change their mind either
    21 Oct 2013, 08:25 AM Reply Like
  • jfstinson
    , contributor
    Comment (1) | Send Message
     
    Interestingly enough, coffee is one of those ideas that can't be "stolen" unlike music or software. The Chinese are just going to have to pay for the genuine article with the profits going to the legitimate producer.
    21 Oct 2013, 12:47 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs