Starbucks Corp's SBUX recent moves in China have raised eyebrows among investors.
The Seattle-based retailer faces competition from local brands like Luckin Coffee Inc LKNCY and Manner Coffee.
A significant increase in discounting strategies, such as coupons and two-for-one deals, suggests the coffee giant is reluctantly entering a price war. This development has sparked concerns about Starbucks's long-term strategy and market position in China.
Rising Competition and Discounting Strategies
The Chinese coffee market has seen a surge of low-cost competitors, with Luckin Coffee leading the charge. Luckin’s aggressive pricing strategy, coupled with its innovative app-based ordering system, has made it a formidable rival.
At least one Reddit user, Expensive_Heat_2351, called Luckin Coffee and Manner Coffee “stiff competition.”
User, East-Ad5084 highlights that Luckin offers coffee at prices as low as $1.40, a stark contrast to Starbucks's $5 offerings.
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