How well does Starbucks understand the Chinese consumer? Check out the reception of its limited-edition cat cup
Last week, China was rocked by outbreaks of violence. Well, that might be an overstatement – but at least it got your attention. In actual fact, the ‘violent outbreaks’ might be best summed up as ‘scuffles in Starbucks stores.’ But what’s leading to these scuffles? Starbucks’ latest limited-edition coffee mug: the Cat Paw Cup.
Starbucks’ share price has risen by 12% so far this year
Source: Yahoo Finance
The Cat Paw Cup is a double-walled tumbler with an inside shaped like a cat’s paw. When you fill it, the paw becomes more visible. It went on sale last week, promptly sold out, and led to fights in stores as customers jostled for their chance to purchase one of the remaining mugs.
Once reports of the fights breaking out reached the company, Starbucks tried to calm the situation by making the cups available over its ecommerce site. The plan was simple: from Thursday to Sunday, 1,000 of the cups would be available every afternoon. The problem was that the first batch sold out online in “a tenth of a second”. As a result, Starbucks changed tack and opted to sell all the remaining cups (3,000) on Friday afternoon. Once more, they sold out in under a second.
There’s an air of frivolity to all of this: even at the comparatively high price of 199 yuan per cup, Starbucks is not getting rich from these sales. But the interesting point that underlies it is just how well the company can gauge what Chinese consumers want. Given that China is Starbucks second-largest market, and still a global growth engine, that could prove to be an important advantage over competitors over the coming months and years.
Dominion holds Starbucks in its Global Trends Managed Fund
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