Analysis of Starbucks China's Financial Difficulties and Response Strategies: From the Perspective of Market Competition and Localization

Yihan Xu

doi:10.54097/gkkcmg70

Authors

Yihan Xu

DOI:

https://doi.org/10.54097/gkkcmg70

Keywords:

Starbucks; financial difficulties; market competition; localization strategy.

Abstract

Since entering the Chinese market in 1999, Starbucks has expanded rapidly, relying on its high-end brand image and the "Third Place" model. However, in recent years, fierce competition from local brands and the trend of consumption downgrading have put pressure on its financial performance. In the second quarter of 2025, Starbucks China recorded zero growth in same-store sales, a decline in average transaction value, and a significant shrinkage in market share, exposing the "volume growth with price decline" dilemma it faces. This paper analyzes the challenges Starbucks encounters in the Chinese market and explores its response strategies, focusing on adapting to market changes through localization innovation, digital transformation, and supply chain localization. Using the AMPS model, combined with Starbucks' financial reports and operational data, this paper examines strategies such as optimizing the membership system, cultural empowerment, and flexible operations. The study shows that Starbucks needs to strike a balance between the high-end market and the sinking market, and enhance its competitiveness through digital and localization strategies to cope with intense market competition and achieve sustainable development.

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