First price cut! Starbucks China joins the "price war," with the average price of a large cup dropping by 5 yuan

Starbucks China has lowered prices for the first time, with an average reduction of 5 yuan for tea beverages. Is the former high-end positioning giving way to a "price war"?

On Monday, Starbucks China announced via its official WeChat account that it will collectively adjust prices for dozens of products, including Frappuccino, iced tea, and tea lattes. For example, the average price for a large cup has decreased by 5 yuan, with a minimum price of only 23 yuan.

Starbucks stated that it will continue to focus on "non-coffee" scenarios in product innovation, with multiple products set to receive collaborations and new flavors. Starbucks China aims to bring customers a brand new "non-coffee" experience with more attractive prices, continuous product innovation, and unique customization options.

This is a rare proactive promotion of a price reduction by the American coffee chain giant on its official social media channels. For a long time, Starbucks has maintained its high-end positioning in the Chinese market, emphasizing the "third space."

Starbucks China has lowered prices for the first time, with an average reduction of 5 yuan for tea beverages

Since the beginning of this year, several coffee brands have launched limited-time price discounts. During this year's Dragon Boat Festival, Luckin Coffee reduced the minimum price of most products from 9.9 yuan to 6.9 yuan.

Kudi Coffee has recently benefited from the "price war" on delivery platforms, with many consumers sharing on social media that they could get a cup of Kudi for just a few yuan or even less than one yuan, leading to a surge in Kudi's order volume.

This is the first direct price reduction by Starbucks since the "price war" began in the tea and coffee sector. Previously, the company mainly used coupons to lower product prices.

Faced with increasingly fierce market competition in the coffee sector, Starbucks seems to have regained its growth momentum in the second quarter. Financial reports show that Starbucks Q2 achieved better-than-expected growth in the Chinese market, with net revenue significantly increasing by 5% year-on-year to $739.7 million. Same-store transaction volume increased by 4% year-on-year across various business districts, different city tiers, and operating hours, with same-store sales continuing to improve significantly.

During the financial report conference, Starbucks Chairman and CEO Brian Niccol stated that the recent adjustments to Starbucks China's product line have shown initial results, with the business exhibiting positive growth trends, which is encouraging:

"The Chinese market has enormous growth potential, and we will continue to be committed to the in-depth development of the Chinese market in the long term."

It is worth noting that Starbucks' strategy of introducing more tea-based beverages in the Chinese market contrasts sharply with its approach in the U.S. market. Starbucks is attempting to reverse the downturn in its U.S. business by simplifying its menu and emphasizing coffee products Analysis suggests that this differentiated strategy reflects the different challenges faced by Starbucks in the two largest markets globally: in the United States, it needs to return to its roots to reshape its brand, while in China, it must adapt to local demands