Starbucks announced Monday that it will reduce the prices of some of its icy drinks in China by an average of 5 yuane ($ 0.70) amid the intensification of competition and greater consumer caution about spending.
In a Weixin social network publication, the US cafés network said it will offer more “affordable” prices on tens of its drinks from Tuesday, including frappuccino and coffee without coffee.
Although China is Starbucks’ second largest market after the United States, the coffee market is very competitive and consumers have been more cautious about spending due to the slowdown of the economy and concerns about employment stability.
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The new approach can reduce the price of some Starbucks drinks to up to 23 iUanes, according to the publication.
Chinese rivals such as Luckin Coffee and Cotti even charge for their drinks minimum prices of 9.9 or even 8.8 Iuanes, while large companies JD.com and Alibaba Group enter the food delivery market, accusing competition. With offers and coupons, Chinese coffee consumers can buy a drink for just 2.9 iuanes.
A source close to Starbucks operations said the company was not reducing prices in response to intense price competition, but seeking to attract more customers.
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“Starbucks probably has a long -term strategy, which is focusing on demand for items other than coffee base in the afternoon among consumers,” the source said.
Starbucks had previously said that it would not be involved in a price war, but began to offer lower sized drinks and issue discount coupons to customers.
The American giant has also sought to revive its business in China through the sale of stakes.
