Tuesday, 4 June 2013

Starbucks Brings Its Global Brand but Adopts Local Flavors in Asia Markets

by Dale Buss

The recent Asian tour by Starbucks CEO Howard Schultz highlighted an expansion initiative that may prove the company's most challenging ever: peddling coffee in lands dominated for centuries by drinking tea.
Still, Schultz gamely made stops in Japan and Thailand, where in addition to China and India and other places, Starbucks is bringing its unique brand of experiential drinking, sustainability and community involvement in the hopes of creating some of the same kind of brand magic that it has achieved in the United States and elsewhere. At the same time, it is pursuing LEED environmental certification for many of its stores there.
Actually, Starbucks already hasnearly 1,000 stores in Japan, its first international market outside of North America. Schultz stopped by to celebrate the opening of the new Starbucks Meguro store in Tokyo, whose design and experience has been inspired by the traditional Japanese "Ichi-go ichi-e" service spirit (literal translation, according to Starbucks: one time, one meeting). The store features what the company called in a release "locally relevant, simple design solutions" including cues from traditional tea houses, parts of a green garden and local contemporary art.
Starbucks' bows to the unique tastes of Japanese consumers includes a tiramisu-flavored coffeethat is served at the Tokyo airport.

In Thailand, Schultz stopped in Bangkok to inaugurate the first Starbucks "community store" outside the United States, to celebrate 15 years in the market and to remark on Starbucks' plans to double its store count in the country over the next five years. Starbucks' three other community stores are in Los Angeles, New York and Texas. Each store operates "with a commitment to serving the local community," as a Starbucks release put it, through profit sharing. 10 percent of the sales of "hand-crafted" beverages purchased at the store in the Langsuan neighborhood of Bangkok will be directed to a development fund benefiting health, irrigation and education projects in the northern hill communities of Thailand where Starbucks coffee is grown but where the people tend to be poor.
Starbucks also recently decided to enter India, Asia's third-largest economy, after studying the proposition for six years. Its first store was opened last fall in Mumbai.
In China, where Starbucks plans to nearly double its outlets to 1,500 by 2015, the company is also beginning to peddle CPG items in grocery stores such as packaged drinks and coffee beans, much as it has done in the United States for many years.
But while Starbucks is bringing lots of indigenous cultural and culinary touches to its growing number of stores throughout Asia, there are some elements of "local flavor" that it would be advised to stay away from: In a Starbucks in the heart of Hong Kong's financial district recently, a local newspaper discovered that water from a faucet in a dingy washroom was used for brewing. Since the report, Starbucks has switched to distilled water there.

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