preloader

East Meets West in a Cup: A Spatial Strategy Comparison of Chagee and Starbucks in China’s Beverage Market

Executive Summary

This report examines the spatial, branding, and product strategies of Starbucks and Chagee in the rapidly evolving Chinese beverage market. While Starbucks leverages international positioning with a premium urban focus, Chagee capitalizes on cultural resonance and domestic expansion into both major and emerging cities. This comparative analysis integrates geographic insights with location analytics to reveal how both companies shape their market dominance through strategic placement and demographic targeting.

Starbucks: Premium Positioning with Global Flair

Starbucks entered China in 1999 and has since exceeded 7,000 stores. Its expansion has focused on premium city zones—such as financial districts and high-end shopping centers—especially in tier-1 cities like Shanghai, Beijing, Guangzhou, and Shenzhen. The brand positions itself as the 'third place' for socializing and productivity, targeting upper-income groups and urban professionals. Starbucks has adapted to local tastes through offerings like tea beverages, sugar-free options, and plant-based milk, catering to younger demographics such as Gen Z. In addition, Starbucks recently introduced a new pricing strategy to make its products and services more accessible — a further step in responding to the highly competitive nature of the Chinese market.

Chagee: Culturally Rooted and Youth-Oriented

Founded in 2019, Chagee has swiftly grown to over 6,000 stores by championing 'new-style tea' and tapping into the Guochao (China Chic) movement, which integrates traditional Chinese aesthetics into modern branding. Its positioning appeals strongly to younger Chinese consumers. Unlike Starbucks’ central urban targeting, Chagee’s growth is marked by presence in high-traffic pedestrian areas and second-tier cities such as Changsha, Chengdu, and Wuhan. Its offering focuses on premium milk tea made from fresh, high-quality ingredients.

Get the report now

East Meets West in a Cup: A Spatial Strategy Comparison of Chagee and Starbucks in China's Beverage Market

Download Report

Send download link to:

Subscribe to get exclusive content and recommendations. You can unsubcribe any time.

© 2021 Customer Insight Innovations. All rights reserved.