Localized Marketing Strategies of Multinational Companies in
China: The Case of Starbucks
Le Zhou
a
New College, University of Toronto, 15 Grenville Street, Toronto, Canada
Keywords: Starbucks, Chinese Market, Localization Strategy, Cross-Cultural Marketing.
Abstract: In the background of continuing globalization, transnational corporations need to pursue global brand
unification and adjust the market strategy to be localized according to the characteristics of different markets.
China has an enormous population that drives rapid economic growth, and it has a long cultural tradition and
stable consumer demand. It could provide an international brand not only with so many opportunities but also
bring a lot of challenges. Starbucks, as a typical case to study the localized market strategy, shows how it
could succeed in the complex environment with its local market strategy. This essay analyses Starbucks' entry
strategy, product localization, brand culture integration, and digital marketing in the Chinese market. By
analyzing local consumers' tastes, culture, and acceptance of technology, Starbucks has successfully
established its brand presence in the Chinese market. However, it still faces some challenges among other
brands in China, like competition, price positioning issues, and changing consumer trends. Starbucks' case
shows that if multinational corporations want to develop in the diverse market of China for a long time, they
need to have culturally adaptable, flexible marketing strategies, be emotionally communicative, and have
digitally innovative abilities. And this study could provide experience for other multinational corporations.
1 INTRODUCTION
1.1 Globalization and Challenges for
Multinational Corporations
The rapid development of globalization accelerates
the speed of expanding culture, technology, and
commercialization. This trend presents both vast
business opportunities and complex challenges for
most multinational corporations. Globalizations
contribute to gaining more global resources like
advanced management theory, technology platforms
and brand influence for corporations. They should
enter the global markets. But at the same time, it
needs multinational corporations to know how to deal
with unfamiliar cultural values, legal systems, and
consumer behaviour (Zhang, 2023). However, these
global resources do not have a direct impact on the
complex local environment. For example, the
standard management system cannot match to
executive process in China. So, finding the balanced
a
https://orcid.org/0009-0003-3732-9387
point between global standardization and local
adaptation has become a key to success.
China is an example that is filled with dual
challenges. China is provided with an attractive and
fast-growing market as the world's second-largest
economy. Meanwhile, it brings so many issues like
cultural traditions, a long-standing preference for tea,
and a local digital ecosystem represented by WeChat
and Alipay (Buachie-Mensah, 2012). In this market
environment, the preference of consumers is
influenced by Chinese cultural tradition and the
significance of symbolization (Buachie-Mensah,
2012). At the same time, the multinational companies
can design products is not enough, but they must also
solve how to localize these resources. In this way,
multinational companies must build trust and adjust
their market strategies to meet the requirements of
local consumers. However, some companies which
do not adjust their strategies and only use the global
model find it hard to achieve success to stay in China.
It is very essential to make localized market strategies
to adapt to the special society and characteristics of
culture Chinese market (Buachie-Mensah, 2012).
Zhou, L.
Localized Marketing Strategies of Multinational Companies in China: The Case of Starbucks.
DOI: 10.5220/0013851900004719
Paper published under CC license (CC BY-NC-ND 4.0)
In Proceedings of the 2nd International Conference on E-commerce and Modern Logistics (ICEML 2025), pages 655-661
ISBN: 978-989-758-775-7
Proceedings Copyright © 2025 by SCITEPRESS – Science and Technology Publications, Lda.
655

1.2 Unique Characteristics of the
Chinese Market
Markets in China have multiple unique characteristics
that are significantly different from other new
economies. Firstly, a population of more than 1.4
billion people offers more opportunities for markets,
which include different provinces, different levels of
cities, and social communities (Scott, 2004). This
diversity could help to reach specific consumers
through different products and marketing approaches.
In addition, the rapid urbanization promotes the
growth of the middle class. Especially for consumers
from Tier 1 and Tier 2 cities, they would pay more
attention to the identity of brands, lifestyle, and
consumption experience instead of basic needs (Scott,
2004). So, when they investigate the market, they
need to consider the large number of consumers and
understand deeply the difference between structure
and dynamic change. Secondly, Chinese cultural
values play a key role in consumer behaviour.
Consumers often make purchasing decisions based on
"guanxi", collectivism, and respect for social
harmony and tradition (Shu, 2024). If brands want to
get identification, they must respond to Chinese
values on products and broadcasting. Chinese
consumers focus on group identity, social status, and
brand credibility. It is different from Western
countries in that consumers often want to emphasize
their personality and self-expression. So, if foreign
brands decide to build loyalty, they must understand
and respect the standard of culture (Boachie-Mensah,
2012). The combination of differences in population
structure and value system makes it hard to make a
single strategy play a role in the Chinese market. This
boosts the demand for localization. Finally, China's
digital ecosystem is localized and innovative. Some
Apps like WeChat include communication, shopping,
payment, and social functions, which have reshaped
the idea from awareness to purchase (Akasaka, 2022).
The digital integration boosts the data-driven
personal strategy. The "new retail" model and the
popularization of mobile payments have challenged
traditional marketing strategies. Brands need to adopt
a strategy that combines numbers and innovation as
the core so that they can remain competitive in a
diverse market (Qumu, 2023). Overall, when the
requirements for entering the market, adapting culture
and technology are met could be successful in China.
1.3 Starbucks in China: An Overview
Many experts doubt the success of Starbucks since it
entered the Chinese market when 1999. At that time,
there were fewer people who drank coffee and
consumed coffee, that is because tea culture was
dominant in China. However, Starbucks transformed
coffee successfully into of lifestyle, status, and social
symbol which is related to the middle class in the
urban (Qumu, 2023) (Shu, 2024). The success of
Starbucks is not using the Western model. It meets the
preferences and values of consumers in China by
localizing its strategy.
Starbucks keeps its core of global brands, such as
quality, community, and sustainability, while
incorporating Chinese elements into its products,
store design, and marketing strategy (Akasaka, 2022).
For example, the coffee mooncakes for the Mid-
Autumn Festival, dumplings for the Dragon Boat
Festival, and using the local style to design stores.
This action not only provides coffee but also creates
a new consumer experience for consumers. The
concept of "third space" meets the expectations of
young Chinese white-collar workers on experience-
based consumption (Akasaka, 2022). Starbucks is
different from some brands that cannot adapt to the
local culture. It adopts a flexible and locally designed
strategy instead of adjusting according to
consumption trends and digital behaviours (Qumu,
2023). The inserting culture strategy is essential to
sustain growth and build brand loyalty.
1.4 Research Objectives and Structure
The purpose of this paper is to analyze the localized
strategy of Starbucks in China. Four aspects need to
be focused on: the approach of entering the Chinese
market for Starbucks and positioning strategy, the
localization of products, the local integration of its
brand culture, and innovation in digital marketing.
This essay discusses how Starbucks could deal with
the specific economy, culture, and technological
environment in China.
In the meanwhile, showing Starbucks'
achievements, this essay also examines the sustaining
challenges that Starbucks faces, such as increasing
competition in the local market, differences in the
field market, and the changing demand of consumers.
Through the whole estimation of success and limit
elements, the article hopes to offer a valuable
reference for other multinational companies that plan
to enter to Chinese market and some Chinese brands
that find a development of globalization.
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2 ANALYSIS OF LOCALIZATION
MARKETING STRATEGY IN
CHINA
2.1 Strategic Market Entry and
Premium Positioning
Starbucks entered China in 1999, it took a localized
strategy approach that included corporate with local
companies and in-depth market research. Firstly, it
started with opening stores in Beijing, Shanghai,
Guangzhou, and other cities that belong to the first-
tier cities. That is better to target the well-educated
urban middle class and white-collar population and
shape an image of a premium lifestyle brand. The
concept of a "third space" means the social place is
outside of the home and workplace. Most people in
China who pay attention to belonging to a group think
this is a good idea (Liu, 2023).
To sustain its premium positioning, the stores of
Starbucks are in premium shopping malls, core
business districts, cultural landmarks, and cultural
landmarks. And they incorporated some Chinese
elements, such as calligraphy and traditional tattoos,
into the store design to enhance its local cultural fit
(Shu, 2024). This localized strategy makes Starbucks
a cultural symbol of young Chinese professionals. Its
early success is because of the balance between
global brand positioning and local experience (Shu,
2024).
2.2 Product Localization to Match
Local Palates
To better incorporate the taste of Chinese consumers,
Starbucks designed a localized product that blends the
global culture of coffee with traditional Chinese
flavours. In addition to the normal beverages, the
company has launched some new items such as
Matcha Frappuccino, Red Bean Latte, and
mooncakes limited to the Mid-Autumn Festival
(Akasaka, 2022). The more important thing is
Starbucks's focus on the feedback from customers.
They can acquire real-time responses through some
channels such as store sales data, online comments,
media interaction and so on. This festival and cultural
product not only respects the local taste but also
improves the emotional connection of consumers.
Starbucks adjusts its menu according to Chinese
eating habits and adds some light snacks, dim sum,
and Chinese pastries (Xia, 2024). Also, the brand has
introduced products that include images of Chinese
zodiac signs, holiday symbols, and local specialties.
These products become a part of young people's
lifestyle. The flexible approach that Starbucks used in
China is different from the approach of other markets,
such as Australia, which failed due to a lack of
localization (Zhang, 2023). Starbucks in Australia
cannot understand the traditional culture of coffee in
depth, which leads to the price position being too high
to meet the demand of the market. In contrast,
integrating some cultural elements in China builds an
emotional connection. This strategy enables them to
get widespread recognition and long-term customer
loyalty in the local market. Thus, the failure
experience in Australia shows the importance of
understanding and integrating culture, this case
provides a real reference and a warning for
optimizing in China.
2.3 Digital Innovation and "New
Retail" Adaptation
In the face of a developed digital system, Starbucks
has adopted a technological marketing strategy.
Through the cooperation with Alibaba, Starbucks
combines mobile ordering, digital payment, member
rewards, and third-party delivery, and builds a
continued platform (Zhang, 2024). On the "Star
Delivery" service and customized WeChat apps,
consumers could place an order, payment, track
delivery and interact with the brand directly in the
digital environment. This follows the developed trend
in China of "new retail" that integrates online and
offline (Akasaka, 2022).
Starbucks optimize its members' system through
dynamic updates on personalized pushes, points
mechanisms and exclusive offers. It has also
optimized its membership system through digital
channels, including some functions like launching
new products on mobile, game interactions, and
personalized offers based on user behaviour. These
increase the attendance rate and repurchase rate of
customers significantly. Also, brands utilize some
digital tools to collect data to optimize the content of
their strategy and store operations. These innovations
have not only improved the service convenience but
also helped to establish the modern, flexible image of
the brand. China is one of the most flexible digital
markets in the world, digital transformation has
become key to maintaining its competitiveness. China
has mobile infrastructure, and customers have a
higher adaptation to technology. This boosts the
company must update the technology and service
experience rapidly. The digital strategy is suited to
these market characteristics. It finishes the online
services like taking an order, payment and delivery.
Localized Marketing Strategies of Multinational Companies in China: The Case of Starbucks
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The brand has been localized by incorporating
Chinese traditional values. Its advertisements
emphasize some themes like "reunion," "harmony,"
and "abundance" in the Chinese New Year and Mid-
Autumn Festival. It enhances emotional identification
and emotional attraction (Liu, 2023).
They collaborate with some local artists to
incorporate aesthetics into packaging and store design
to improve cultural affinity, which is very popular
with young consumers (Shu, 2024). Meanwhile,
Starbucks builds a responsible brand image by
creating projects like education, environmental
protection, and rural revitalization (Shu, 2024). These
strategies strengthen consumer trust, maintain its
international image, and achieve deep resonance with
Chinese values.
2.4 Brand Localization and Cultural
Resonance
In the face of a developed digital system, Starbucks
has adopted a technological marketing strategy.
Through the cooperation with Alibaba, Starbucks
combines mobile ordering, digital payment, member
rewards, and third-party delivery, and builds a
continued platform (Zhang, 2024). On the "Star
Delivery" service and customized WeChat apps,
consumers could place an order, payment, track
delivery and interact with the brand directly in the
digital environment. This follows the developed trend
in China of "new retail" that integrates online and
offline (Akasaka, 2022).
Starbucks optimize its members' system through
dynamic updates on personalized pushes, points
mechanisms and exclusive offers. It has also
optimized its membership system through digital
channels, including some functions like launching
new products on mobile, game interactions, and
personalized offers based on user behaviour. These
increase the attendance rate and repurchase rate of
customers significantly. Also, brands utilize some
digital tools to collect data to optimize the content of
their strategy and store operations. These innovations
have not only improved the service convenience but
also helped to establish the modern, flexible image of
the brand. China is one of the most flexible digital
markets in the world, digital transformation has
become key to maintaining its competitiveness. China
has mobile infrastructure, and customers have a
higher adaptation to technology. This boosts the
company must update the technology and service
experience rapidly. The digital strategy is suited to
these market characteristics. It finishes the online
services like taking an order, payment and delivery.
3 THE EFFECTIVENESS AND
CHALLENGES OF
STARBUCKS' LOCALIZATION
STRATEGY
3.1 Successes in Market Penetration
and Brand Equity
The localization strategy implemented by Starbucks
in China has achieved outstanding market success.
By 2023, China will become the second market in
the world after the United States for Starbucks. The
number of stores is more than 6000, and it covers
about 230 cities (Qumu, 2024). Starbucks is not only
visualized as a coffee brand in China but also a
symbol of lifestyle for white-collar workers, college
students, and the middle class (Xia, 2024).
The core concept of "third space" (the social space
outside of home and company) is incorporated with
consumers' daily patterns. So, the stores rapidly
become a complex space that integrates business
negotiation, self-study gatherings, socializing with
friends and relaxation. With localized products and
cultural elements merged into store design, this
connects deeply with customers' emotions (Shu,
2024).
Starbucks has also strengthened its brand value
through a consistent brand strategy. While
maintaining the globally harmonized values of
"Quality, Comfort, and Community", they actively
adapt to the local demand. They introduced the menu
in a dual language and included some activities that
combined Chinese festivals and store designs with
local characteristics. These actions enhance the
familiarity and trust of consumers (Akasaka, 2022).
More importantly, Starbucks has an important
impact on boosting the development of coffee culture
in China. In the background of a traditional tea-
dominated culture, Starbucks contributes to building
a cognition about coffee for consumers. And let
coffee become a fashionable and sophisticated
lifestyle choice. The success of Starbucks has led to
more local coffee and a third wave of coffee culture
(Qumu, 2024).
In addition, Starbucks participates in education,
environmental protection, and community building in
China (Shu, 2024). This steadies the image of a
responsible global brand. The retail leaders and brand
representatives are all struggling with integrating into
Chinese urban culture.
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3.2 Persistent and Emerging
Challenges
Although Starbucks has a strong performance in the
Chinese market, the challenges that the strategy has
faced may influence the growth and market stability
in the future. The most prominent challenge is the rise
of local coffee such as Ruixing Coffee. Ruixing
Coffee attracts some young consumers who are based
on the “mobile-first” approach by using the low-price
strategy, rapid product iteration, and digital
convenience. This group pays more attention to
efficiency and value for money instead of random
ambiance or history and culture (Lyu, 2023).
Ruixing’s ability to quickly launch new products and
online promotions has enabled it to rapidly develop in
second-tier and third-tier cities. This breaks the
traditional coffee retail landscape.
Starbucks insists that premium price positioning
is helping to strengthen its brand positioning, but the
high price also limits its expansion in the market. In
second-tier cities and third-tier cities, most people
think coffee is only a normal beverage instead of a
premium experience. In this way, the price of
Starbucks is much higher than the price of Ruixing,
so it cannot attract customers (Qumu, 2024).
At the same time, the demand of Chinese
consumers for health, functional drinks, and personal
services is increasing. The drinks, which are low-
sugar and supplemental, are more popular. And data-
driven personalized recommendations and
interactions have become the new standard for service
experience (Lyu, 2023).
The sustainable concept is focused on customers,
especially young people. If a brand cannot achieve the
promise of environmental protection and social
responsibility, it is hard to maintain brand loyalty.
The sustainable goal designed by Starbucks globally
does not completely correspond to the local concerns
of Chinese consumers. So, they need to perfect their
packaging, waste management, and community
partnerships to be localized.
Besides, the field difference in China is a
challenge, too. There are some differences in taste,
language, payment habits, and lifestyles between
different cities. So, they need to adjust some aspects
of products, sales, and store experiences. In the
meantime, uncertainties in the macroeconomic
environment, like cautious consumption after the
epidemic, policy changes, and inflationary pressures,
also increase the risk to the brand's operations (Lyu,
2023).
Therefore, Starbucks must keep its highly flexible
approach and continue to deepen its innovation. They
could collaborate closely with Chinese local
technology and make their brand strategy correspond
to the changed values of consumers to achieve this
goal. In this rapidly transforming market, the brand's
sustainable competitiveness is determined by the
adaptability of its strategy.
4 REVELATION OF STARBUCKS
LOCALIZATION STRATEGY
4.1 Strategic Insights for Multinational
Corporations
The experience with the localization strategy of
Starbucks in China provides several important
strategic insights for other multinational companies
that wish to succeed in multicultural markets.
Firstly, the in-depth culture is very critical. The
superficial adjustment is not enough to achieve a
sustained impact, like changing a slogan or launching
a symbolic product. The reason for the success of
Starbucks is that it integrates Chinese cultural values,
aesthetics, and festive traditions into the product
design, store environment, and communication
strategy (Akasaka, 2022). So, achieving the
connection between emotions and cultural fit that
beyond the transactional level.
Secondly, technological innovation must become
a prior strategy in the technologically advanced
market. Starbucks has active mobile payment, a
member App system, and a digital platform that
combines WeChat with Alipay (Akasaka, 2022). This
dramatically improves the convenience and
interactive participation of customers and makes
brands consistent with modern consumption habits.
Thirdly, the allocation of the market needs to be
dynamic and data-driven. Starbucks makes a
difference in products and price positioning strategy
according to the level of cities, income groups, and
regional tastes. In contrast, static or overly
standardized strategies are hard to achieve in the
highly diverse market in China (Zhang, 2024).
Fourthly, the establishment of emotional brands
and corporate social responsibility is essential to get
long-term trust. Through sustained investment in
education, environmental protection, and community
development, Starbucks shapes an active brand image
and integrates with the local society (Shu, 2024).
Finally, global brands need to keep a balance
between local adaptation and brand consistency.
Starbucks maintains its core values of “quality,
community, and sustainability” while adjusting its
Localized Marketing Strategies of Multinational Companies in China: The Case of Starbucks
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flexible local strategy to ensure cultural fit and keep
the essence of the brand. For most multinational
companies, this ability to “adapt without getting lost”
is a key to across the complexity of culture.
4.2 Implications for Chinese
Enterprises Going Global
With China's growing economic power, more and
more enterprises are actively entering the
international market. In this process, the localization
experience of Starbucks in China offers an important
reference for strategy for Chinese companies.
Starbucks, as a global brand, integrates itself into
Chinese culture deeply. Chinese firms need to learn
how to combine their products with the environment
of foreign consumers when they enter to world. This
not only involves product delivery but also emotional
branding, cultural sensitivity, digital operations, and
corporate social responsibility (Xia, 2024).
Firstly, the emotional brand is crucial. Starbucks
successfully establishes brand identification by
providing an experience instead of just selling coffee.
The “third space” concept, localized store design, and
holiday-only products deeply combine brands with
the lifestyle of consumers and their emotions.
Chinese companies need to open their transaction-
oriented thinking and create a brand story that meets
the internal demand of customers, values, and
identity.
Secondly, respecting local culture and integrating
deeply is the basis. Behind the success of Starbucks
is its precise adaptation to traditional Chinese culture,
aesthetics, and social habits. If Chinese firms would
like to enter the cultural system in Europe, America,
or other countries, they need to make a localization
adjustment in product design, language expression,
service mode, and marketing content. If they use the
unified “globalization” model would be hard to
acquire trust and sustain the market.
Thirdly, digital innovation needs to become a
connector instead of just a tool. Starbucks builds a
whole digital system in China and combines WeChat
apps, mobile ordering, membership programs, and
real-time promotions. Chinese brands also need to
invest in establishing a local digital platform.
Utilizing the local data to achieve personal service to
advance user stickiness and brand relevance (Xia,
2024).
In addition, corporate social responsibility plays a
key role in the acceptance of global brands. Starbucks
has acquired broad recognition in Chinese society
through sustainability, education support, and
community building (Shu, 2024). Chinese companies
need to do something like Starbucks to address
environmental, ethical, and social responsibility
issues in their target markets. For example, carbon
neutrality, transparent labour systems, or community
involvement programs.
Ultimately, the key to success is to balance the
strategy. Chinese companies not only keep innovating
but also accept the differences in local diversity and
values. Truly global brands need to resonate with the
locals instead of being consistent globally. Starbucks'
journey in China shows that only listening, adapting,
and integrating deeply could win cultural recognition
and long-term competitiveness in a global market.
5 CONCLUSIONS
Starbucks' success in China shows other
multinational companies that, in conditions that do
not satisfy the unity of a global brand, it could also
achieve a reference of stratified localization. By
combining the brand with local tastes, cultural norms,
digital behaviours, and emotional values, Starbucks
has successfully changed coffee into a symbol of
fashion and lifestyle that Chinese consumers pursue.
This change not only changes the superficial
marketing adjustment but also depends on a deep,
systemic localization strategy that permeates
products, store environments, and digital platforms.
The core of the success of Starbucks is that it
could make a balance between the unification of the
global brand and cultural sensitivity. The brand could
establish a true cultural connection through
seasonally limited products, local cultural aesthetics,
festive marketing campaigns, and localized employee
hiring. In digitalization, Starbucks actively promoted
mobile ordering, member apps, and in-depth
integration with WeChat and Alipay to meet some
consumption habits of Chinese consumers, like
"mobile-first, social-oriented". In the meantime, the
store in the position of "third space" improves the
emotional connection and lets consumers not only
consume coffee but also build a sense of socialization
and belonging.
However, dynamic adaptation must be the
condition of sustaining success. Local brands like
Ruixing, with its flexible innovation, digital drive,
and pricing strategy, would be a strong challenge for
Starbucks. Also, the increasing expectations of
consumers on health, personality, environmental
protection, and social responsibility are a challenge
but also an opportunity. So, Starbucks needs to
continue to localize products, price positioning, and
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CSR practices to approach the real demand of the
Chinese community.
On the one hand, the insight of this case is not only
appropriate for Starbucks itself but also for all
multinational corporations. Localization is a
continued process of strategy instead of one
adjustment. It needs to depend on cultural
understanding, continued investment, and flexible
organizations. Corporations need to learn how to
express to the consumers, how to listen, collaborate,
and build long-term trust with them. This is the choice
of strategy, and it involves some operational
management, such as hiring local talent, cross-
cultural training of employees, and giving local teams
autonomy in decision-making.
On the other hand, Chinese brands could gain
some experience to enter to global market. Cultural
sensitivity, emotional branding, and technology
integration are also essential strategic elements for
Chinese brands to enter overseas markets. Chinese
brands need to keep a
balance between “national
identity” and "local relevance when they enter into
Western, African, or Southeast Asian markets.
In the future, it is worthwhile to pay attention to
how Starbucks deals with the differences in Chinese
regions, how it connects with national sustainability
strategies, or how it compares to other Western
brands. These issues help us to fully understand how
business outcomes are determined by cultural
strategy in the context of globalization.
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