According to observers, Starbucks’ best chance of overcoming fierce competition and deflationary difficulties in China is to form strategic alliances and go back to its origins as a destination where people come for a coffee “experience.”
Declining sales and profits have put the coffee giant under pressure globally, but issues in its second-largest market after the US have been made worse by a sluggish economy and consumers who are reluctant to spend in the midst of a protracted, confidence-damaging real estate market collapse.
Due to this, Chinese brand Luckin has overtaken Starbucks as the market leader in China; in 2023, its domestic revenue topped that of its rival in the United States.
