Starbucks is being called out by the Chinese State Media for disproportionately increasing prices on their goods sold in China in comparison to other countries. The criticism comes from the official Chinese media, which is targeting Starbucks and other well-known foreign companies for exorbitantly increasing prices in order to produce an excessive profit margin, which is almost 32%.
The critics claim that Starbucks charges as much as 50% more for their products sold in China compared to the United States, United Kingdom, and India.
In defense of their pricing model, Starbucks released a statement saying that their pricing in foreign markets reflects the “local business costs such as labor, commodity costs. Infrastructure investment, currency and real estate.”
Further complicating this claim, is the high degree of inflation in China due to the relatively recent economic expansion as well as experts who allege that the differing markets and operating costs don’t account for the entirety of the inconsistencies between Starbucks’ prices in China compared to their prices in other foreign markets. Critics claim that Chinese consumers’ loyalty to western products is at least partially to blame for the price increases.