Starbucks hit hard by tightfisted foreigners - Shaun Rein
Image via WikipediaStarbucks is one of the enterprises in China that is being hit hard by the global downturn, harder than others, writes Shaun Rein in Seeking Alpha, because they rely to a large degree on foreign customers. Rein, director of the China Market Research Group (CMR) has been one of the pundits refusing to accept the common feeling that China's is following a global trend downwards. But for the popular coffee house he has to make an exception, as for other high-end restaurants in Shanghai.Business has been hard very hard, because two of the three key markets of Starbucks are foreigners, expats living in China's big cities, or visiting executives who used Starbucks as the replacement office.
As one waiter of a top foreign-focused restaurant in Xintiandi told me, "The Chinese are spending the same if not more than before. The foreigners are just not coming anymore or, if they do, are cutting back spending." This has been a sentiment echoed in interviews we have conducted with dining establishments throughout China, from small restaurants to expensive hotel restaurants in a Starwood (HOT) or Marriott (MAR).As expected, in the long term (say the second half of 2009) Shaun Rein remains optimistic about China's economy.
Commercial
Shaun Rein is a speaker at the China Speakers Bureau. Do you need him for your conference, board meeting or panel? Do get in touch.
Shaun Reinby Fons1 via Flickr
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=897bf259-5e6c-4696-a1dd-633a72ca6ef6)
5 Comments:
this is the weakest article Shaun has ever written.
They have over 80 stores in Shanghai ,and he thinks that is to support the foreign population? Even within the top performing stores in Xintian di, Lujiazui, and Nanjing road the percentage of Chinese buyers are well over 80% and have been a long time.
He would have known that had he simply spoken to someone at Starbucks.
Shaun Rein is obvious a frequent user. Any others who help us out? Are the Chinese also stopping to spend their money (a story I have heard quite a lot over the past few days)?
Well, I can definitively (and personally) say that we are probably witnessing the end of the fat expat packages.
I've been here for many years, and my professional condition has been deteriorating since, even more drastically since the economic crisis.
Staying here too long in my opinion, is definitively not good in terms of career perspectives (non native Chinese speakers and foreigners).
The only option in the long term, is to start your on business, which I did. Otherwise, the market is quickly becoming similar to the US market. At least for white collars.
So, I do agree that SB might feel the pinch right now, it does not surprised me at all. It is a reality I've witnessed around me about many of my ex-colleagues.
It's not that I'm tightfisted, it's that Starbucks is a bullyboy company that threatens small competitors with legal action if they copy any of its promotional methods. Starbucks is the coffee version of Macdonald's, making the world a blander place.
From frequent contacts with our Chinese friends, it is clear for us that Chinese people are spending less: travels have been cancelled, going less frequently out for dinner end a complete stop on buying expensive items. One friend has a small transport company and is now loosing 12.000 yuan per month because business is too slow. He is considering closing his business if there is no change soon. Another friend is running a few small but popular restaurants; he is telling me that income is down with 25% since a few months now.
Post a Comment
Links to this post:
Create a Link
<< Home