Geeky Things

Recently there is a interesting coverage on how Starbucks actually helped independent / small coffee shop by opening a store next to them. They have provided a explanation saying that because Starbucks actually have no competitive advantage over small coffee shop as of  Wal-marts over local store. Meanwhile, when Starbucks start up a new store they are actually doing all the promotion for the small store, so that’s why Starbuck can’t kill small coffee shop.

My experience in Hong Kong may give another explanation: It is the same situation in Hong Kong, where Starbucks’s expansion result in more and more local small coffee shop, but it seems all about culture.

Amongst my friends none of us have the habit of going to coffee shop before Starbucks arrive Hong Kong. Starbucks, in Hong Kong, is actually another culture phenomena, providing "bourgeoisie" life in a relatively cheap price. Everyone think that going to Starbucks is cool and show that you are "middle class" in contrast with the grassroot restaurants, or McDonald. In recent year this culture had further develop small coffee shop specialized in different life style — coffee shop + books, coffee shop + movie, coffee shop + (any culture)…

This culture change is very successful as a business practice as it can change customer’s behavior. Now people go to Coffee Shop for business meeting, friends gathering or just reading book, people go to Starbucks for coffee with a book instead of restaurant for milk tea with a newspaper when they have too much time And that’s how Starbuck get $30 from you for a $3 coffee.

The problem is just — after all of these culture change, how long can Starbuck keep the advantage and lead the market?