Starbucks Under Fire in China for Higher Prices

Published on Author marybeth
Starbucks Pricing in China
Starbucks Pricing in China


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.




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One Response to Starbucks Under Fire in China for Higher Prices

  1. It’s crazy to think that Starbucks could get any more expensive! I always thought that Chinese labor was less expensive for these types of businesses, so I am surprised that they can get away with saying that the local business cost is higher. I do believe that the real estate price would be high for Starbucks in China. In big cities the price for small spaces is sometimes higher than comparable locations in the United States.