Starbucks China officially enters the summer battle of freshly made beverages.
Starting today, Starbucks has reduced the prices of &#34;non-coffee&#34; drinks such as Frappuccino, Iced Shaken Tea, and Tea Latte, with price cuts ranging from 2 to 6 yuan.
If calculated based on the large cup standard, the average price reduction reaches about 5 yuan.
After the price adjustment, the minimum price per cup drops to 23 yuan, placing it at the same price level as mainstream mid-range milk tea brands.
Starbucks, which has stated on many occasions that it &#34;does not engage in price wars,&#34; is reducing prices for the first time through direct price cuts rather than issuing coupons.
Starbucks China announced that on June 17, it will launch three new co-branded iced shaken teas in collaboration with &#34;Zootopia.&#34;
In addition, the Tea Latte will also welcome more new flavors.
Behind the intensive official announcements, it is not difficult to see Starbucks' determination to strengthen its afternoon tea beverage segment.
Since the beginning of this year, Starbucks has frequently taken localization actions, changing its previous restrained business strategy.
On the product level, it caters to the market demand for sugar-free and low-sugar options, rolling out zero-sugar flavored coffee in all stores nationwide. It breaks the norm of rarely collaborating with celebrities, generating widespread attention on social media with its collaboration with Mayday.
This coffee giant, once considered restrained and conservative, is now facing competition in the Chinese market head-on.
<h2>High-profile Price Cuts</h2>
In recent years, Starbucks has been achieving indirect price reductions through large coupon distributions and discount packages.
Under regular promotional packages like the double cup card and multiple visits card, the price of Starbucks beverages does not exceed 25 yuan.
Since 2023, the average transaction price for Starbucks China has continued to decline year-on-year.
In the face of fierce competition in the domestic coffee and tea beverage market, Starbucks' strategy of &#34;exchanging price for volume&#34; has not succeeded.
In 2024, same-store sales for Starbucks China have declined year-on-year for four consecutive quarters, entering a performance low period.
Even after discounts, the &#34;cost-performance ratio&#34; remains insufficient.
Not only is it struggling to cope with the 9.9 yuan coffee era, but traditional lattes and macchiatos also lack appeal to young consumers in the era of flavored coffee.
Rather than being dragged down by continuous low prices, it is better to enter the market boldly and attract more traffic attention.
Starbucks once attributed the decline in customer flow to the decrease in occasional customers, stating that this phenomenon is more pronounced in the afternoon and evening.
Using low-priced &#34;non-coffee&#34; products to attract customers is expected to not only fill idle orders but also enhance Starbucks' competitiveness in lower-tier markets.
Sweet &#34;non-coffee&#34; beverages represented by Frappuccino and Iced Shaken Tea have always been popular in lower-tier markets.
According to Liu Wenjuan, the current CEO of Starbucks China and former COO, &#34;Although the average transaction price is low, the willingness to order is strong, and the customer flow in the afternoon and evening is more stable.&#34;
Entering the price war is just the surface.
Compared to last year's limited-time offers of &#34;45.9 for two cups, 55.9 for three cups&#34; after 4 PM, the current price reduction by Starbucks does not show a significant increase compared to previous reductions.
The ultimate intention may point to the vast space in the &#34;non-coffee&#34; beverage market.
In 2024, the market size of freshly made tea beverages in China will exceed 272.7 billion yuan, with the overall scale surpassing that of the freshly made coffee market.
Yang Zhen, Chief Growth Officer of Starbucks China, stated: &#34;A complete product matrix in the 'non-coffee' scenario will run parallel with core coffee products, allowing Starbucks to create different product combinations and experiences based on various consumption scenarios and store types.&#34;
Regarding whether this price reduction is &#34;limited time&#34; or &#34;long-term,&#34; Starbucks China responded: &#34;It will depend on customer feedback to decide on subsequent activity plans.&#34;
If further platform discounts and subsidies are added on top of this round of price reductions, there is a possibility that the final price of the products could be even lower.
<h2>The Battle is Imminent</h2>
Faced with the upcoming peak season for summer beverages, the price reduction is a defensive move by Starbucks.
Currently, the ready-to-drink tea market has become a chaotic battleground, with the boundaries between coffee and tea companies increasingly blurred and the competition expanding.
Luckin Coffee, under the Mixue Ice Cream brand, has surpassed 5,400 stores and launched over ten new fruit coffee products last month.
Luckin, which has crossed over from coffee to tea drinks, has expanded its product range to include fruit and vegetable teas and coconut water, building on its success with light milk tea and lemon tea.
Delivery subsidies are adding many variables to the competition.
Since JD.com announced its entry into the delivery market, coffee and tea drinks, characterized by high frequency and low decision-making costs, have become a focus of this round of platform subsidies.
Starbucks' response speed is faster than ever.
Only two months after JD.com officially announced its entry into the delivery market, Starbucks announced a partnership with them, becoming the first dining brand to fully integrate its membership system with JD.com, seizing the platform subsidy benefits.
However, this still cannot compete with the lower original product prices of Kudi.
As one of the biggest winners in the delivery battle, Kudi's order volume on JD.com has exceeded 100 million.
In May, Kudi opened over 1,000 new stores in a single month, approaching a historical peak in store opening speed.
Luckin, which has been reducing low-price subsidies for several consecutive quarters, has sensed a crisis, with the prices of several non-core beverages dropping from 9.9 yuan to 6.9 yuan on the Luckin mini-program and delivery platforms.
Not to mention Starbucks, which just achieved positive same-store sales last quarter, is currently facing cup volume anxiety.
Starbucks' long-term challenge still lies in: how to seek a balance between brand tone, cost-effectiveness, and popularity.
Unable to let go of its past glory, it is difficult for the coffee giant to truly step down from its pedestal.
Schultz once defined Starbucks in his autobiography as a &#34;company that relies on its brand for survival.&#34;
This means that Starbucks finds it hard to part with the intrinsic value of its brand symbols.
The high costs associated with the &#34;third space&#34; model make it difficult to compete with the affordable coffee that expands through the &#34;store within a store&#34; model.
However, in terms of marketing and products, Starbucks has begun to actively learn from the successful experiences of local brands.
Since March, Starbucks China has successively collaborated with Snoopy and the brand STAYREAL founded by Mayday's lead singer Ashin. In June, the iced tea series will collaborate with Disney's &#34;Zootopia.&#34;
The adjustment of marketing strategies is closely related to changes in the local management team.
In September 2024, former Starbucks China Co-CEO Liu Wenjuan was promoted to CEO.
In December, Starbucks China welcomed its first Chief Growth Officer (CGO), Yang Zhen, responsible for product development and launching new products targeting young users, achieving digitalization from research and development to operations and marketing.
In the first quarter of 2025, Starbucks' Belgian dark chocolate series and rose 20 series achieved success, with same-store comparable transaction volume increasing by 4% year-on-year, significantly improving same-store sales.
Rumors of a &#34;sellout&#34; still loom
According to Bloomberg, Starbucks has engaged with private equity firms, technology companies, and others to consider various options for its China business, including a possible equity sale.
For Starbucks China at the current stage, growth remains a core aspect that must be maintained.

SBUX

- Starbucks China has officially entered the summer competition for ready-to-drink beverages by reducing prices on non-coffee drinks like Frappuccinos and iced teas by 2-6 yuan, with an average drop of about 5 yuan.  
- This marks a shift from their previous strategy of avoiding price wars, as they aim to attract more customers during the afternoon tea segment amidst fierce competition in the beverage market.  
- The company plans to launch new iced tea flavors in collaboration with "Zootopia" and is adapting its product offerings to meet local consumer demands, while also exploring potential partnerships and growth strategies.

Starbucks rarely lowers prices, boldly entering the summer tea beverage battle