Starbucks to lower prices in China as competition heats up
In a post on its Weixin social media account, the U.S. coffee chain said it would offer more "accessible" prices on dozens of its drinks, including non-coffee drinks and the Frappuccino, from Tuesday.
While China is Starbucks' second-largest market after the U.S., the coffee market is highly competitive and consumers have become more cautious about spending because of the slowing economy and concerns about job security.
The new approach means some of Starbucks' drinks will be priced as low as 23 yuan, the post said.
Domestic rivals such as Luckin Coffee and Cotti have priced their drinks as low as 9.9 or even 8.8 yuan, while deep-pocketed internet companies JD.com and Alibaba have entered the food delivery market, adding to the competition. With offers and vouchers, Chinese coffee consumers can buy themselves a drink for as little as 2.9 yuan.
A person close to Starbucks, said the company was not reducing prices in response to intense price competition, but looking to attract more customers in the afternoon.
The individual requested anonymity as they were not in a role that allowed them to comment to the media.
"Starbucks likely has a longer-term strategy, which is to focus on the demand for non-coffee items in the afternoon among consumers," the source said.
Starbucks had said previously that it would not engage in a price war. However, it has also introduced smaller-sized drinks and issued coupons which have lowered prices for customers.
The U.S. giant has also been looking to revive its business in China via selling stakes in the business.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New York Post
an hour ago
- New York Post
Chinese nationals living in US charged with smuggling millions worth of Nvidia's powerful AI chips to Beijing
Two Chinese nationals living in California – one illegally – were arrested for smuggling tens of millions of dollars worth of high-powered Nvidia AI chips to Beijing, the Justice Department said Tuesday. The pair allegedly shipped advanced graphic processing units, including Nvidia H100 GPUs and Nvidia 4090 GPUs, to China from October 2022 to July 2025 through their El Monte-based company, ALX Solutions, according to an affidavit filed with the complaint in US District Court in Los Angeles. Chuan Geng, 28, of Pasadena, and Shiwei Yang, 28, of El Monte, were charged with violating the Export Control Reform Act, a felony that carries a maximum of 20 years in federal prison. Advertisement Yang, an illegal alien who overstayed her visa, was arrested on Saturday and Geng, a lawful permanent resident, surrendered to federal authorities later that day. The smuggled chips were the 'most powerful GPU chip on the market,' and 'designed specifically for AI applications,' such as 'to develop self-driving cars, medical diagnosis systems, and other AI-powered applications,' according to the complaint. The arrests come months after the Trump administration imposed sweeping export curbs in May in an attempt to crack down on China's ability get its hands on advanced chips to throttle Beijing in the AI race. Advertisement Nonetheless, a bombshell report late last month revealed at least $1 billion worth of Nvidia chips were smuggled into China in the three months following Trump's ban. The powerful chips were still being sold by Chinese suppliers to data center operators – even after the controls took hold, according to a Financial Times analysis of sales contracts, company filings and interviews with sources with direct knowledge of the deals. ALX Solutions was founded shortly after the Commerce Department began requiring licenses for advanced microchips in 2018 during Trump's first term in office — including the ones that Yang and Geng are accused of shipping overseas, according to court documents. The company allegedly used a common tactic to skirt export restrictions by shippiing the illicit wares to China through other countries. Advertisement ALX Solutions routed at least at least 20 shipments, including one last December, from the US by using freight-forwarding companies in Singapore and Malaysia, according to the DOJ. The pair made several shipments of graphic processing units to China from October 2022 up until last month, according to an affidavit filed with the complaint. BLKstudio – The California firm never received payments from the those in Singapore and Malaysia, but it did receive money from companies in Hong Kong and China – including a $1 million payment in January 2024, the complaint alleged. The defendants' phones – which law enforcement seized last week after raiding their office – also revealed incriminating conversations about routing chips through Malaysia to evade US laws, the complaint alleged. Advertisement Geng was released by a federal judge late Monday on $250,000 bond. Yang remains behind bars to await a detention hearing on Aug. 12. Their arraignment is slated for Sept. 11. The Justice Department declined to provide further comment. Lawyers for the Chinese nationals were not immediately known. The Post reached out to ALX solutions for comment.
Business of Fashion
2 hours ago
- Business of Fashion
Online Retailer Zalando Raises 2025 Guidance After About You Acquisition
German online fashion marketplace Zalando raised its 2025 guidance on Tuesday after adjusting its projections to include newly acquired About You. The Berlin-based company said it expected gross merchandise volumes to grow by 12-15 percent, up from a previously expected range of 4-9 percent. Zalando is investing heavily in its European logistics network, which it has also opened up to partners as it seeks to drive growth amid faltering consumer spending and competition from fast-fashion retailers such as Chinese rival Shein. The About You acquisition was completed in early July, valuing Zalando's smaller rival at €1.13 billion ($1.31 billion). The company also said it achieved second-quarter gross merchandise volumes of €4.06 billion, up from €3.86 billion a year earlier. By Tristan Veyet; Editor: David Goodman Learn more: Zalando to Buy German E-Commerce Player About You for $1.3 Billion Berlin-based Zalando said Wednesday it will offer €6.50 per share for rival e-tailer About You, a 67 percent to Tuesday's closing price.
New York Post
2 hours ago
- New York Post
Starbucks scraps scores of grab-and-go locations — here's what that means for mobile ordering
Starbucks' grab-and-go windows are on their way out. The coffee giant plans to close a good portion of its 80 or 90 locations that only offer mobile order pickups during the 2026 fiscal year as part of its 'back to Starbucks' initiative. As of now, Starbucks hasn't specified which locations will shutter or when. 'This shift doesn't mean all of them will close,' a Starbucks spokesperson clarified to 'Where it makes sense, we'll convert some into traditional coffeehouses with seating to better serve our customers and communities.' Starbucks CEO Brian Niccol announced the news during the company's July 29 earnings call, the outlet reported. 3 Starbucks is planning to 'sunset' locations that only offer mobile order pickups. David Paul Morris/Bloomberg via Getty Images He described the grab-and-go model as 'overly transactional and lacking the warmth and human connection that defines our brand.' 'We have a strong digital offering and believe we can deliver the same level of convenience through our community coffeehouses with a superior mobile order and pay experience,' he added. Before you fret about how you're going to efficiently snatch up your morning mocha latte en route to work — mobile ordering as a whole will still be offered by Starbucks. 'We're not moving away from mobile ordering — it remains a critical part of our business, accounting for 31% of transactions,' the spokesperson told the outlet. The Post has reached out to Starbucks for comment. 3 CEO Brian Niccol described the grab-and-go model as 'overly transactional and lacking the warmth and human connection that defines our brand.' Kelly Tyko, USA TODAY, USA TODAY via Imagn Content Services, LLC 3 Starbucks currently has 'roughly' 80 or 90 mobile pickup stores. REUTERS/Mohammad Khursheed/File Photo Niccol has been making quite a few changes to the popular coffee chain since he became CEO of it back in September 2024. He plans to cut various food and drinks options from the menu and has even already changed the employees' uniform for a 'more consistent coffeehouse experience' — something that has enraged entitled Gen Z workers. A TikTok video captioned: 'Starbucks workers across the country are facing understaffing, inaccessible benefits, discrimination and low wages.' 'Instead of fixing these issues, Starbucks decided to introduce an unpopular, more conservative dress code.' In the video, workers further expressed their frustrations with the coffee giant's new policy — something that has divided people in the comments. @sbworkersunited Starbucks is making baristas follow a conservative dress code – a huge change from what's currently policy, and wasn't bargained for with our union. That means many workers have to buy all-new wardrobes out of pocket while limiting expression through outfits and makeup – and legally needs to be bargained with workers. Baristas at the Seattle Roastery marched together as a union to confront their unreceptive management and demand they also address lack of hours and staffing. If Starbucks isn't listening, we'll keep taking action until they do. ♬ original sound – Starbucks Workers United Some agreed that a dress code for employees should be in place. 'No one is paying these people to 'express themselves.'' 'Get back to basics and serve the customers.' Others agreed with the workers in the video. 'Flare inspires workers … it's science.' 'Who cares what someone wears serving coffee. As long as they are kind and efficient, I'm good!' 'One more reason not to go there.'
