China Marketing Weekly: Is Suing Starbucks A Smart Marketing Move In China?
It’s almost Friday! When I was in college, we used to say that Wednesday feels like a little Friday and then a week is almost over. :-)
But before you switch to the weekend mode, make sure you read our recent China marketing updates! This week, we’re back talking about Luckin Coffee. It threatens to sue Starbucks in China. It’s a huge chunk of news, so if you’re not interested, just go to the latter part right away.
Nara just discovered you can open a WeChat service account with a foreign business license now, which is great news! Also, some more foreign companies had to bow to the Chinese government lately, including Gap and popular airlines.
I’ll stop you just for a few more seconds. We’re creating a China Marketing 101 guide - it might be useful for those of you who are just starting out in China. It’s based on live-streaming trainings we did during the last few months. So stay tuned not to miss it! Don't forget to let us know what you’d like to read about! What are the very first problems you encountered entering China market? Reply to this email!
Luckin Coffee threatens to sue Starbucks for unfair competition. The startup published an open letter to Starbucks accusing it of signing contracts of exclusivity with commercial property owners that forbid them from leasing space to other coffee-related companies. Luckin Coffee also states that some suppliers of machinery, equipment and ingredients signed non-competition deals with Starbucks. - Read more (English / Chinese)
It’s been a hot topic on Chinese social media during the week, mostly because Luckin Coffee stroke when the iron was still hot. For the last month, everyone talked about the startup’s marketing campaign (read our post here). Now, as the promotion is coming to an end and many people deleted their app, they decided to piggyback on Starbucks’s popularity. There is no such thing as bad publicity, right?
Having read comments on Weibo and other platforms, and having talked to our team I notices opinion are very different. Some people say it’s not fair what Starbucks do and that Chinese people should support domestic brands instead of foreign ones. Especially that Starbucks is an American brand and it’s yet another reason for people to say how much they dislike Americans.
On the other hand, many netizens mentioned Luckin Coffee will go down anyway, it’s just a matter of time - cause their brand is all about the aggressive marketing campaign, and the quality of their coffee is just so-so. And again, just as I mentioned in the blog post, coffee drinking culture in China is not strong enough. Starbucks brings a bit of luxury, it’s a form of spending free time. Luckin Coffee wants to build coffee drinking habit in China, they target different clients, it may not float. And suing another company before you even manage to build a trust for your own brand… It’s a risky move, in my opinion.
Foreign companies are now allowed to open their own official accounts. First, it was only Japan and Korea, but now Tencent allowed companies coming from other countries set up a WeChat account as well, Canada and the US included. You can use your own business license, cell phone number and personal passport to apply for a service account. In theory, at least. Because as we wanted to test it out, we discovered that to complete the application process you need company’s official seal. The problem is that not all of the foreign companies have a seal. Tencent has not solved that problem yet.
In general, though, it’s a good news. Cause as soon as they solve the seal problem, setting up an official account will be much easier.
Trending on Social Media
Typical Chinese mums wear scarves! Just as “typical mum” memes prove that mothers around the world have very similar problems and thoughts, Chinese netizens just discovered almost all the mothers in China pose for photos exactly the same way. After a guy posted a picture of himself imitating Chinese mums’ pose, the netizens flooded him with comments saying “if you wore a scarf, you’d become a 100% Chinese mama!”. No one knows where the scarf trend comes from, but it’s a real thing among the mothers.
But it’s not over, have a look at a video of another guy posing like a mama. It’s hilarious, and so true!
Claw crane machines are back in fashion in China. They’ve been somehow popular since 2015, but recently the heat just went up. Mostly because of short-video platforms that promote various types of challenges, winning a toy playing the game being one of them. In Chongqing, you can even play a live-action game! No matter if you’re a kid or an adult, for 20-50 RMB you can try getting a teddy bear with your own hands. - See the video here
“Chinese Hero Captain” lands the Sichuan Airlines plane safely after its cockpit windshield is suddenly ripped away. After rescuing his co-pilot who was sucked halfway out of the window, the Hero Captain ((#中国英雄机长#) brought the plane safely to Chengdu. His cold blood got 80 million views and over 200,000 comments on Weibo. - Read more (Chinese / English)
Daraz, the largest e-commerce platform in Pakistan, was just acquired by Alibaba Group. In 2016, Alibaba bought Lazada Group, which became the major e-commerce platform for consumers in Singapore, Thailand, Philippines and Malaysia. It’s yet another huge move for Alibaba on its way to expands their international market share. - Read more (Chinese)
Bowing To Beijing
Gap apologizes for the T-shirts displaying a map of China without Taiwan. After publishing the official apology, the company also informed that "this batch of products had been pulled off shelves in the Chinese market and destroyed". People's Daily tweeted about it yesterday, and one of the users commented: "It is nothing new, many western medias tend to describe incomplete Map of China. It is one way to brainwash peoples especially the younger generation. The best way to teach these companies a lesson is boycotting the products. [sic]" - Read more (English)
A few days later, Chinese tourists arrived in an airport in Vietnam wearing T-shirts with a controversial map depicting Beijing’s claims to the disputed South China Sea. They were soon asked to take off the T-shirts if they wanted to leave the airport. - Read more (English)
Air Canada lists Taiwan as part of China. Starting this week, if you search for a flight to Taiwan Taoyuan International Airport, you will see the airport listed as “Taipei, CN”. The same action was taken by Lufthansa. It’s because The Civil Aviation Administration of China issued a notice last month demanding international airlines to remove any information stating Taiwan is an independent country from their websites. The only organisation that didn’t fold under the Chinese government’s pressure in the recent months was… Eurovision. - Read more (English)