Competitors from all walks of life sprung up like mushrooms.
Starbucks China tightens its membership system under pressure in China
"Do you have a star card? I can help you collect stars. " Every time before Starbucks's consumption, shop assistants always ask such questions. Star Hewlett-Pack has been one of Starbucks'means of enhancing user viscosity since its launch in the United States in 2008, and it was introduced into the Chinese market in 2011. However, in China recently, there have been some changes in the membership rules of Star Hedonic Card, including stricter rules for calculating and accumulating stars, and different levels of membership can get different coupons than before.
The reporter of China Business Daily noticed that along with the members'adjustment, the price of some drinks increased. For example, the price of big cup American style rose from 27 yuan to 28 yuan, and the price of medium cup latte rose from 28 yuan to 29 yuan. The last price increase of Starbucks in China was in June 2016.
Rising prices and more stringent star accumulation seem to be related to Starbucks'performance in China in recent years. Starbucks'third quarter earnings for fiscal year 2018 showed that same-store sales in the Chinese market fell for the first time in nine years, down 2% year on year. When the same store sales growth slows down, it may be necessary to lift prices and shrink concessions to improve performance.
Up to the time of publication, Starbucks public relations officials did not respond to questions raised by journalists.
Free coffee is missing?
The reporter noticed that the announcement posted by Starbucks on China's official website showed that the change of members'rights and interests would take effect on December 5. Starbucks points are known as "stars", and changes have been made in the calculation and accumulation rules of stars: at present, members can get a star for every 50 yuan they consume, and they can get a star for every 40 yuan they consume using Starbucks gift cards tied to Starbucks App, but the other payment methods are still 50 yuan a star. This means that Starbucks encourages consumers to download Starbucks Apps and consume them with Starbucks cards rather than cash or ordinary micro-payment.
Secondly, the time limit is more stringent. If the accumulated stars do not qualify for promotion within three consecutive months, the accumulated stars will be eliminated automatically. The original accumulated time is an account year. In addition, there are differences in the coupons available to members of different ranks. Some commentators believe that fewer opportunities for members to drink coffee later.
Starbucks Customer Service told reporters, "At present, members need to buy Starbucks or Starbucks. The basic grade of Starbucks is Silver Star. The price of Starbucks is 108 yuan (scale pattern). They can enjoy three invitations for relatives and friends (buy one free), one invitation for breakfast coffee and one liter invitation voucher. After December 5, if you want to become a member of Silver Star, you can register directly with Starbucks App. You don't need to buy any of these coupons. This seems to have lowered the access threshold for members.
Yang Xiaoling, who works in an advertising company, purchased Starbucks Starbucks Starbucks Starbucks Hedonic Card as a member in 2013. "I remember very clearly that an ordinary Starbucks Starbucks Hedonic Card sold for 88 yuan at that time. Sometimes it was more expensive to produce custom cards. Now 88 yuan is basically not sold. But the so-called customized card is better than the ordinary card, the rights and interests are the same, the total price must be higher than 88 yuan. She said she had a crazy "star-gathering" day. "There was a time when Venus would be demoted if she did not spend any more, so she would spend in two months and gather 25 stars!"
At present, Yang Xiaoling, a gold star, noticed that in the new membership plan, "Buy three free vouchers and one coupon, instead of Venus promotion gift vouchers, nine good gift stars in the new plan exchange a cup of coffee with the original purchase of ten free vouchers is not much different." However, she was somewhat puzzled that in the new plan, golden stars could enjoy a golden star-exclusive electronic Star gift card without balance. "It's a little strange that there is no balance." In addition, the time of stars accumulating and clearing is more severe than before.
Or for compressing costs.
In fact, Starbucks adjusted its membership plan in 2016, which caused some consumer dissatisfaction. Previously, in the United States, as long as you complete a single purchase (no matter how much you spend), you can get a star, 12 stars can be exchanged for a free coffee or food voucher. However, after the adjustment, the Star Award Scheme will be based on the amount of consumption, not the number of consumption. That is to say, two stars can be obtained for every dollar consumed, and 125 stars can be collected to obtain membership benefits. That is to say, it needs to consume more than $62.5 to get membership benefits. The New York Times has written that the logic behind these changes is that companies want to reward their most profitable customers, not necessarily their regular customers. Take Starbucks, it will lose a group of customers who consume less.
Reporters noticed that Starbucks introduced the Star Hedonic Card system in the United States in 2008. Star Hedonic Card made some adjustments, but still mainly rewarded, from not grading at that time to paying a membership fee of $25. By 2014, Starbucks had sold 1.6 billion cards in North America, up 17% year-on-year, with about one in seven Americans. In China, in February this year, Wang Jingying, CEO of Starbucks China, mentioned that there are about 6.2 million active Starbucks members in China, but the number of active members is close to half of the U.S. market. "The Chinese team has been introducing Star Hewlett-Pack to new customers. One of the tasks is to ensure that they become repeat customers and that existing customers visit them more frequently," she said.
"In fact, membership cards almost have the same function, that is, to get more consumers, to strengthen the viscosity between customers, to get higher brand loyalty. In the United States, Starbucks membership system is increasing the threshold, but also more stringent, and biased to hope that every customer who comes to the store to spend more, the most direct result is to improve the revenue of the store. Lin Bei, who runs boutique coffee in Guangzhou, has told reporters.
Similar actions are taken in the Chinese market, including price increases for some drinks, more stringent star accumulation, differences before and after coupons, and encouraging members to buy Star Gift Cards for consumption. They are more likely to improve performance by raising some prices and shrinking preferences when sales growth at the same store slows down. Same store sales are considered to be one of the most important business indicators in the catering industry. In the third quarter of June 30th as of 2018, Starbucks's same store sales increased by only 1%. In the highly anticipated Chinese market, same-store sales fell 2% year-on-year, the first decline in Starbucks China in nine years.
Competitive environment is complex.
Facing the performance of the third quarter, Lu Shengzhen, a Fast-consuming consultant familiar with the coffee industry, said, "Coffee shops will generally enter a mature period after 7 to 8 years of growth, and the new consumers are roughly equal to the lost consumers. A single shop in a cafe is stagnant or down, which is likely to represent a stagnation or decline in overall performance. Lu Shengzhen believes that the way to solve the overall performance is to open new stores and make up for the growth limitations of single stores by using quantitative advantages. Starbucks added 585 stores throughout the fiscal year of 2018 in China. According to its official website, Starbucks has opened more than 3400 stores in 140 cities in China. It plans to achieve 6000 stores in China before September 2022.
But selling new and old stores seems inevitable. Kevin Johnson, president and CEO of Starbucks, has said before: "In China, we focus on increasing trading volumes in all stores. Starbucks'new stores in the new city need to keep up with sales, and existing stores need to avoid competitive eating effects. This seems to be one of the reasons for the decline of Starbucks'Chinese stores in the third quarter of this year. "If old and new stores are encroached on by sales, the way Starbucks relies on opening stores to maintain growth may not be so effective." Lin Bei said.
In order to gain new profit growth points, Starbucks has opened many cities to cooperate with hungry coffee takeout business. To a certain extent, it may also be under the competitive pressure of Internet coffee from Ruisheng coffee and even coffee. The former spent 1 billion yuan in subsidizing users and advertising in the first half of the year, and opened more than 1400 stores, while the latter completed 158 million B + rounds of financing in March. "The development path of Ruisheng coffee is similar to that of Korean brand coffee. First of all, it is to invite big stars to speak for you and launch fancy discount marketing. Secondly, publicity calls for the formulation of the world coffee Barista. In China, the rental cost of location selection is not low. Sun Haitao, Secretary General of Guangzhou Coffee Industry Association, said.
Sun Haitao said, "Fortunately, no statistical data have been published, it is not clear whether a brand depends on capital means can win the market. Ultimately, to achieve profitability, we need to return to the operation itself and test the ability, including quality, taste, personnel training and so on.
In addition to the above brands, Starbucks now faces a much more complex market environment than it used to rely solely on Expansion Strategies to grow rapidly. The challenge first came from the same giant on the fast track, the transforming carbonate giant Coca-Cola announced a wholesale acquisition of Costa coffee for $5.1 billion; Nestle, its old rival, was also looking for opportunities to cooperate. First, it invested $500 million in controlling Blue Bottle, the premium coffee brand, and then paid Starbucks $7.15 billion for its coffee retail. Business. According to Euromonitor, Nestle is the absolute leader in the global coffee market, accounting for 22.6% of the market, while Starbucks only accounts for 2.5%. But in the US, on the contrary, Starbucks has 13.7% market share in the United States, but Nestle has only 2.2%.
"Looking at the global coffee industry, the giants are gradually building their own business territory; in the Chinese market, Starbucks is increasingly unable to ignore its competitors, in addition to Internet coffee brands that may pose a threat in the short term, there are many overseas coffee brands have entered China; a new generation of tea drinks such as Happy Tea The brand of "snow tea" is coming closer to the development direction of "China Starbucks". Lin Bei told reporters.
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