Life in urban China isn’t cheap, especially for those with a taste for imported goods. The list of pricey foreign products includes Starbucks coffee, which can cost 30% more than the same brew in the U.S. — a fact that on Oct. 21 precipitated a takedown of the American coffee chain by China’s state broadcaster CCTV. The TV network noted in a 20-minute program that a tall latte in Beijing costs $4.40, while only $3.30 in Chicago, despite the fact that income levels are much higher in the States than in China. This means that Starbucks is a “luxury” and even “outrageous” product in China, while “a perfectly normal thing” in the U.S., said CCTV.
Last week, other state-linked media pilloried Starbucks, which hopes that China will soon become its second largest market after the U.S., with 1,000 stores by the end of the year. The China Daily, which is considered the Chinese government’s English-language mouthpiece, ran a critique headlined “Starbucks Can’t Justify High Prices in China.”
Starbucks is just the latest foreign firm to receive a critical full-court press from Chinese media, which on occasion are encouraged by state minders to highlight certain issues or target certain companies, according to Chinese journalists. This year, Apple and Walmart, among other foreign firms, have been criticized for everything from high prices to inferior customer service and goods. In the case of KFC and McDonald’s, a CCTV investigation over the summer found that ice cubes served at these fast-food eateries’ Beijing outlets were dirtier than toilet water.
The reputation of foreign fast-food brands may have suffered from such health exposés by the state media. But others campaigns against foreign companies haven’t resonated among the coffee-sipping, iPhone-swiping Chinese elite. For one, foreign products, although expensive, still enjoy a better reputation than domestic ones, which have suffered from far more safety scandals than the odd dirty ice cube. For another, overseas brands still hold allure for their very foreignness and can make money accordingly. Häagen-Dazs ice cream parlors, for example, are a popular date spot for urban Chinese, who don’t appear to blink at spending up to five times more than what similar treats cost in the West. This is a banana split as a status symbol. Indeed, Häagen-Dazs is expanding across China, despite occasional broadsides from the Chinese press. In 2011, for instance, one local media outlet in eastern Shandong province sniffed that some Häagen-Dazs “chefs talk with each other while working, without wearing mouth masks.” Given all the horror stories involving Chinese food — toxic infant formula, glow-in-the-dark meat, recycled cooking oil fished from gutters — chatty chefs hardly seems the most shocking of scandals.
(MORE: Can Starbucks Conquer India?)
There’s also the overall effect of sticker shock in China. In urban areas, real estate prices have spiraled so high that even small apartments cost the equivalent of many decades’ worth of average incomes. In such an environment, the roasting of a foreign coffee company can feel trivial. Ding Laifeng, head of a PR agency in China, wrote on Sina Weibo, China’s popular social-media platform, “CCTV reported that the coffee sold by Starbucks in Beijing is several [Chinese yuan] more expensive than what it sells overseas. O.K., we can choose not to drink coffee. But we have to live in homes. Can CCTV fire its cannons at local governments selling land at high prices? No one can avoid getting sick. Can CCTV report on the huge profits created under the current health care system? Apart from that, people have to make phone calls and add gas to their vehicles. All these prices are more expensive in China than in the U.K. or the U.S. Can CCTV fire its guns at monopoly state-owned enterprises? Why don’t they do something that actually matters?”
— With reporting by Chengcheng Jiang / Beijing