Tuesday, 22 October 2013

Grinding the Wrong Way

A Xingbake or Starbucks on Qianmen Street in Beijing
Chinese state media are usually united on issues. They take the same stand suggested by the government and then go of on their own tangents, but they are basically taking the same line.

However, it is just as amusing when they start criticizing each other.

A few days ago China Central Television presented a scathing report on Starbucks, saying it had "hefty product prices" on the mainland compared to other international cities.

It said that the price of a 354ml cafe latte in Beijing cost 27 yuan ($4.43), higher than in London (24.25 yuan), Chicago (19.98 yuan) and Mumbai (14.60 yuan).

The program interviewed the chairman of the Coffee Association of Shanghai, who estimated that a tall cafe latte cost less than 5 yuan to make, and that Starbucks' 32 percent profit margin in the China/Asia Pacific region in the second quarter was higher than in other regions.

Reports like this fan the flames of economic nationalism, but not to the point of last year's torching of Japanese cars and trashing Japanese restaurants because of the Senkaku/Diaoyu Island dispute flared up again.

Nevertheless, the report on Starbucks follows criticism of Apple, with complaints about its warranties and customer service, and then Fonterra's baby milk powder being contaminated.

While all state media were on board with Apple and Fonterra, they didn't go along with CCTV on Starbucks.

Some internet users suggested CCTV go after state-owned enterprises that profit from practically having monopolies on the market, that not only sell expensive products but also have shoddy service.

People's Daily didn't seem impressed with CCTV's report. "Other than coffee, what else is more expensive in China than overseas?" it asked on its Sina Weibo account. It then answered its own question that listed such items houses, cars, medical expenses and education fees.

Seems CCTV will have to crawl back to its corner with its tail between its legs and wait for an Alpha dog to take the lead to avoid making the same mistake again.

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