Starbucks is playing the co-branded marketing card again, and the "anxiety" is about to overflow

Starbucks, which rarely collaborates with others, suddenly announced a collaboration with QQ Yellow Face. Why did Starbucks start co-branding marketing again? This article will help you explore the reasons and help companies understand the new needs of Chinese consumers through the Starbucks case.

Starbucks, which used to rarely engage in joint marketing, is doing it again!

In mid-May, Starbucks announced a collaboration with QQ Yellow Face and launched an ice cup and peripheral products with five expressions.

In the copywriting of Starbucks' Xiaohongshu account, there is a lot of empathy for workers. "Your face has been online and your daily mood is written on the cup (smiley face)."

Image source: Xiaohongshu

But not all consumers can buy "No Hee Hee" on Monday and "Hee Hee" on Friday, so the following situation occurs:

Image source: Xiaohongshu

Think about it, on a sunny and pleasant morning, when you get a cup of "non-joking" coffee, the workers' defenses are broken at that moment.

In this way, many netizens complained about the weirdness, and the complaints even overshadowed the popularity of the joint name. In response to the Starbucks emoji cup, Starbucks said that the emoji packs were randomly distributed and could not be selected. On Weibo, the topic #Starbucks responds to emoji cups being complained about the weirdness# alone has a reading volume of 5.736 million.

Whether it is a meme or a complaint, no matter what the outside world thinks, this collaboration with Starbucks has sparked a heated discussion on social media.

Starbucks has been doing marketing like this frequently. Earlier this year, Starbucks collaborated with "Havoc in Heaven". In April, Starbucks collaborated with Disney for a limited time in a flash event, both of which attracted a lot of attention.

These popularity are extremely valuable to Starbucks in the past two years. After all, it is in the fiercely competitive coffee track, which even the big brother of the track cannot avoid.

Behind these actions is Starbucks' full of anxiety.

1. Joint ventures, expansion into lower-tier cities, and discounts: Is Starbucks “anxious”?

Compared with this collaboration with QQ Yellow Face, Starbucks’ collaboration with Chinese IP Sun Wukong at the beginning of this year is more representative.

Before this, Starbucks had not been without joint ventures, but most of them were with Disney, Swarovski, ANNA SUI, etc., and the joint ventures were concentrated on peripheral products such as theme cups and packaging bags.

But this time, the collaboration with the "Journey to the West" IP, in addition to launching limited peripheral products, also launched new products around the IP.

In the takeaway channel, Starbucks launched the "flowing latte", including French caramel, rum chocolate, and rose flavors. In terms of product form, the "flowing latte" coffee cloud and milk gradually freeze in layers during the delivery process, just like the effect of Sun Wukong blowing a breath of fairy air.

Image source: Xiaohongshu Starbucks joint "Havoc in Heaven"

In the store channel, Starbucks launched the "Peach Festival" series, including "Golden Baked Ice Shake Peach Oolong" and "Golden Baked Oatmeal Peach Latte". It is reported that the inspiration for the Peach Festival comes from the Peach Festival in the animation "Havoc in Heaven".

These five products have deeply "integrated" elements of "Havoc in Heaven", a cartoon with unique Chinese characteristics, in terms of product naming, production, taste, peripherals and content promotion.

Although this seems to be just an ordinary joint marketing activity, after all, before Starbucks, domestic coffee brands have done a lot of cross-border joint marketing, such as Luckin Coffee and Moutai, which attracted a lot of attention.

But this is Starbucks' first time targeting the Chinese market, deeply collaborating with Chinese culture, and launching core products based on IP.

Shortly after this collaboration, Starbucks collaborated with Disney for a limited time in a pop-up event, launching the "Alice Water Lily Flavored Latte", "Cat and Cat Spring Orange Flavored Latte" and "Mad Hatter Wasabi Pistachio Latte".

In addition to frequent joint marketing, Starbucks has also taken many other actions since last year, such as sinking and discounts.

In the first quarter of 2023, according to The Paper, Starbucks entered more than 10 new cities, all of which are China's fourth- and fifth-tier cities.

In the first 20 years after entering China, Starbucks was positioned as a "mid- to high-end" brand in the minds of consumers, and its stores were concentrated in first- and second-tier cities. Now, Starbucks has also begun to target Chinese county towns.

The founder of Starbucks also expressed the meaning of "sinking" in his public speech in April. He said that Starbucks will open more than 10,000 stores in China. As Starbucks gradually completes its layout in first- and second-tier cities, county towns will be Starbucks' most important market.

In addition to opening stores in lower-tier cities, Starbucks' prices are also "quietly" "sinking." Earlier this year, Starbucks founder Howard Schultz repeatedly stressed that he would stick to the high-end pricing strategy and "had no interest in joining a price war."

But recently, many netizens have found that on the Starbucks app, there are coupons for "39.9 for two cups" or "49.9 for two cups". Although the product prices have not dropped, these coupons that appear from time to time can also vaguely feel Starbucks' "hesitation" on prices.

Image source: Starbucks promotional image

What is going on behind these unusual actions by this big brother in the coffee industry?

2. Why is Starbucks so anxious?

"Internal and external troubles".

This may be the core reason why Starbucks is so active.

Starbucks' internal problems are clearly revealed in its recent financial report.

Starbucks still delivered a good performance in fiscal year 2023 (ending September 2023). The financial report shows that in fiscal year 2023, Starbucks' revenue was US$36 billion, a year-on-year increase of 12%, a record high, and its net profit attributable to shareholders was US$4.125 billion, a year-on-year increase of 25.69%; the fourth quarter revenue was US$9.374 billion, a year-on-year increase of 11.4%, also a record.

However, Starbucks' financial reports have shown signs of "decline" since the 2024 fiscal year. After entering the 2024 fiscal year, Starbucks has repeatedly lowered its growth expectations.

In the first quarter of fiscal year 2024, Starbucks' revenue was US$9.425 billion, an increase of approximately 8.2% year-on-year; net profit was US$1.024 billion, an increase of nearly 20% year-on-year, both slightly lower than market expectations.

The financial report shows that Starbucks' revenue in Q2 of fiscal year 2024 was US$8.56 billion, down 2% year-on-year; net profit was US$770 million, down 15% year-on-year.

Starbucks revealed in its financial report that the reason for the decline in both revenue and net profit was the North American market. However, Starbucks is not optimistic about the Chinese market either.

In Q2 of fiscal year 2024, the number of Starbucks stores in China increased from 6,243 in the same period last year to 7,093, but revenue fell from US$763 million to US$705 million, a year-on-year decrease of approximately 8%.

On the day Starbucks released its Q2 financial report for fiscal year 2024, its stock price plummeted and its market value evaporated by US$15.915 billion, equivalent to about RMB 115 billion.

A big reason for the unsatisfactory revenue in the Chinese market is the fierce competition in the Chinese coffee market, the spread of the 9.9 yuan coffee price war, and the involution of innovation in the coffee category. Even Starbucks, which focuses on the mid-to-high-end market, cannot avoid this.

On the one hand, the 9.9 yuan coffee era started by Luckin Coffee is still continuing, and many brands continue to join the below 10 yuan array. For example, KFC, McDonald's and other catering brands have also launched 9.9 yuan coupons.

It is reported that in 2023, Luckin Coffee's total sales in the Chinese market will surpass Starbucks China for the first time.

According to financial report data, Luckin Coffee's quarterly revenue exceeded Starbucks China's quarterly revenue for the first time. In the new fiscal quarter, Starbucks China still did not sell as much as Luckin, and the gap widened.

On the other hand, the popularity of China's coffee market continues to rise, with many new entrants, such as Mixue Bingcheng's Lucky Coffee. These brands are either positioned as boutique coffee or affordable coffee.

The smoky market and declining performance have made this big brother in the coffee industry "anxious", forcing it to take more actions to cope with the Chinese market.

3. Conclusion

Starbucks’ recent frequent actions, whether it is co-branded marketing, sinking strategy or promotional activities, all reflect the anxiety and desire for change of this big brother in the coffee industry.

In addition to the above reasons, there is another important reason: Chinese consumers' coffee tastes are changing.

In the past, Starbucks thrived in the Chinese market with its high-end brand image and stable quality. But now, more and more Chinese consumers are beginning to pursue more cost-effective coffee and are willing to try new brands and new flavors.

In this situation, Starbucks had to make changes.

In the future, the Chinese coffee market will continue to maintain rapid growth, but competition will also become more intense. Whether Starbucks can get out of its anxiety and regain its glory depends on whether it can adapt to the new demands of Chinese consumers and make corresponding adjustments.

Author: Wang Xiaoshu, Editor: Yang Yong

Source: WeChat public account "Hydrogen Consumption" (HQingXiaoFei)