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Responsibility for luxurious prices falls on consumers

Global Times (2013-10-25 P17)
By Wang Wenwen
Illustration: Liu Rui/GT

Illustration: Liu Rui/GT

Starbucks has come under fire in China after CCTV alleged the world's largest coffee chain of charging much more for its coffee in China than in other countries. The coffee chain becomes the latest Western company to face scrutiny by Chinese consumers.

But Starbucks seems not to have been thrust into an uncomfortable position. Despite some media criticism, on China's social networks, there has been a tidal wave of support for this famous coffee brand.

Online users complain that as China's cost of living and housing prices are rising higher than in the US despite much smaller incomes, why bother about coffee prices?

The backlash reminds me of last year's media criticism on McDonald's. After CCTV reported that one of its franchises in Beijing sold out-of-date food and used dirty beef in its meals, people were surprised to find that the reports didn't affect McDonald's already-impressive business.

Rather, Chinese consumers showed sympathy toward to this US fast food chain, which saw an obvious surge in consumption. Some even bantered that being attacked by State media seemed the quickest path to market success.

When it comes to Starbucks, I remember a friend of mine commenting  "Among all coffee brands I have tried, Starbucks is the one that tastes best. The price, well, is acceptable."

This epitomizes the principle of the market economy: Demands determine the market. Honestly, for a connoisseur, Starbucks' coffee is not particularly impressive. But it's head and shoulders above the efforts of most domestic coffee chains at present, not to mention the pleasant décor and well-trained staff.

If a foreign brand can make such extravagant profits as CCTV claimed, isn't it a good opportunity for domestic brands to explore this market? If media really want to create a fair competing ground for domestic brands, it had better start with educating people of their rights as consumers.

The gap between rich and poor is increasingly obvious nowadays. While for the vast majority of Chinese, a 27 yuan ($4.44) cup of coffee would be a distinct luxury, there is another group which has considerable consumption capabilities. They are more inclined toward Western tastes and spend money on "fashion" regardless of quality and cost. Not only in Starbucks, but also in foreign luxury brands stores in China, even when products are sold at a much higher price than in other countries, there are still people willing to pay the price.

Of course, authorities' role in regulating prices and the need, if any, to levy higher taxes on these foreign brands should be discussed. But customers still have the right to choose the brands they like.

After all, their own sense of consumption makes their consumption outlandish.

Coffee, which came to China only in the 20th century, is always portrayed as a romantic and glamorous item. This is especially so at the moment where the middle class or white-collar workers often harken after a Western lifestyle.

Starbucks not only uses coffee as their selling point, but also its relaxing atmosphere. These intangible factors are perhaps what makes Chinese consumers willing to pay more.

The dilemma that Starbucks faces now results from the process of Chinese acceptance of coffee culture. If we blame the pricey coffee of foreign coffee chains, why don't we consider why there is no widely accepted Chinese-style teahouse chain?

It's almost impossible to find a decent teahouse that provides the traditional Chinese drink and an elegant atmosphere at a fair price. If we want better goods, we need to mobilize our own money.

The author is a reporter with the Global Times.

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