Starbucks in China: Now in Yunnan

Starbucks rapid growth is hard not to notice in some of the more metropolitan cities in China.  In cities such as Shanghai it is not difficult in some places to find several Starbucks within a 10 minute walk of each other, if not closer.  However, Starbucks has recently begun to focus much of its growth into many cities that are unfamiliar to most people outside of China.

For example, in Kunming in the new shopping complex at the bottom of these buildings:

Is what on Thursday will be the first Starbucks to open in Yunnan, a province in Southwest China:

They will also be opening two other stores in Kunming during the following month, including one at this location only a few minutes walk away:

(extra bonus: take a look at the family of three all on one motor scooter, not a very uncommon sight in China)

Opening stores in Yunnan isn't significant only because of it being far from China's more developed eastern coast, but also because Starbucks late last year announced it would set up a coffee bean farm and processing facilities in Yunnan - significant for a province that doesn't receive the level of investment from foreign companies seen in many other provinces.

Although the first store wasn't yet open, staff were outside serving free samples of a caramel latte drink -- what for many was their first taste of Starbucks:

I was invited inside to take look around the store while they were putting on the finishing touches and starting to clean up:

While much of the style is Western, there are certainly some local touches to highlight Starbucks' special association with Yunnan:

Although the drink menu has many similarities with those found in the US, there are some differences.  For example, similar to Dairy Queen localizing its Chinese menu with mango drinks, Starbucks also has a mango drink not typically found in US stores: the Mango Passion Fruit Frappucino.  I was told that Yunnan grown coffee would not be on the drink menu, but come September customers would be able to buy Starbucks Yunnan coffee beans in packages.

Starbucks was still looking for new employees in Kunming, including these two who were applying when I stopped by:

However, Starbucks wasn't taking any risks and had brought in several experienced employees from its other stores in China, as far away as Xian and Beijing, to help for a month or two, including these two Coffee Masters:

Starbucks' employees are expect to maintain a quality and style of service similar to Starbucks' stores in the US.  While rapidly changing, service "attitudes" in much of China are different from the US so some hands on training by experienced staff is particularly important.

Based on my experience today, it seems like Starbucks has brought in a very friendly and open group to help kickoff their new store, especially my "guide" for my brief tour who used the familiar English name "Mickey":

Finally, it appears that Starbucks isn't similar to Dairy Queen only in its decision to add mango drinks to the menu, but it also faces competition similar to that faced by Dairy Queen from Mango Queen and DU.  In another part of Kunming is:

Teabucks Tea Store

Yes, Teabucks.

Welcome to Kunming, Starbucks.

[UPDATE: See details about the grand opening of this Starbucks here]

Mobile Phones in China: Local Rates, Fashion, and Fakes

I've done a significant amount of research into mobile phone use in China -- to improve existing mobile products & services, to innovate new ones, and to find ways to better market them to potential users.  In this post, I'll introduce at a general level some of the key themes in what I've discovered during my independent explorations across China by highlighting several illustrative examples.  What I'll share in this post is just the tip of the iceberg for a host of interesting topics to delve into, is focused on Chinese youth, and is not intended to be all encompassing.  I'll share more themes, examples, and thoughts on this topic in later posts as well.

To begin, what I learned about a female student in Jilin, Jilin Province (see here for some scenes from Jilin) highlighted at least two key aspects of how mobiles phones are used and chosen by some in China.

If you look closely at the photo of the student above, you'll notice she has two mobile phones -- one in her hand that she is using at the moment and another hanging from her neck.

Why two mobile phones?  One reason is that she grew up in Hunan Province, far away from where she was going to school in Jilin.  She considered the roaming fees for using her Hunan phone number in Jilin to be too high but but she still wanted to keep her Hunan number since she didn't want to lose contact with people and would be returning there regularly.  Therefore, she needed two different phones numbers, meaning two different SIM cards, so she could get local rates whether she was at home or at school.  One of her phones had a Hunan phone number, the other a Jilin phone number.  Using multiple SIM cards to get local rates is common in China and it is not unusual to find locally designed phones with the capability to hold multiple SIM cards (note: getting local rates is not the only reason some in China desire multiple SIM cards).  However, in this case the girl's older mobile phone didn't have that capability and neither did her newer phone.

Did the savings of not having to pay roaming fees more than offset the cost of an additional phone?  Well, that calculation may not have been entirely critical since there was also another important reason she had two phones.

Her older phone's paint and camera were chipped prior to her departing Hunan for college:

It was still functional in most ways, but to her it was unacceptable in large part due to a key concern.

As seen on her "Fashion Chic" shoes, fashion was very important to her.  Her scratched up phone was simply unacceptable from this standpoint.  So, while she was still in Hunan she bought a shiny new phone made by the Chinese company Oppo:

In China, it is common for many youth (and others as well) to get prepaid SIM cards and purchasing them is a simple process -- no sign up or name registration required for regular usage.  So, when she arrived in Jilin she bought a new SIM card with a local number and put it in her old phone since the new phone already had the SIM card for her Hunan number in it.  Despite the fact that she uses the old phone far more often while at school, it is the new Oppo phone that she hangs from neck.  Hanging the phone from her neck is about fashion, not functionality.

While fashion can play an important role in many countries around the world, its impact in China is particularly striking in the mobile phone domain.  Many are willing to spend a large proportion of their income to purchase a mobile phone, sometimes saving up at least several months of their full salary, out of concerns related to fashion and image.  For many people in China, their mobile phone will be the most expensive and openly visible item that can be with them many places they go -- like a car for many people in the US.  While hanging a mobile phone around ones neck isn't as common in China as it used to be, there remain many opportunities for it to be visible.

Fashion and image aren't only important for many female youth in China but many males as well.  For example, this student at a university in Wenzhou, Zhejiang was also concerned about fashion and image:

And he was willing to spend a lot of money for his BlackBerry phone:

This isn't to say that fashion and image are the only factors that go into choosing a mobile phone for such people, just that they can be primary factors in the choice.

However, there are many more youth in China that can't afford genuine fashionable foreign brand phones, even if they want one.  While some of them choose a local brand, others choose another common option in China: fakes.

For example, at this store in Chongzuo, Guangxi which sold mobile phones that were (supposedly) genuine:

Mobile phone store in Chongzuo, Guangxi

Many of its employees had obvious fakes such as this one:

"Snoy Eriosscn" mobile phone

Some fakes aren't as obvious as the one above -- there are a range of "qualities".  Regardless, the usual motivation to buy a fake is the lower price.  But why not buy an equally priced Chinese brand phone?  For an example capturing one of the key reasons, here is a girl in Shuolong, Guangxi, a small village a few hours away from Chongzuo:

She too made a variety of fashion choices:

But fashion wasn't a concern in her previous choice of a mobile phone:

Nor was it for the new phone she soon planned to purchase.  Her dream phone was a Nokia.  Not because of any concerns regarding fashion but because she believed it would be very reliable and rugged.  However, a real Nokia phone was not a possibility given their relatively high price so she wanted to get a fake Nokia phone since it would be cheaper.

Unlike many other examples I've seen of purchasing fake products, her choice of a fake Nokia versus other relatively inexpensive options did not appear to be driven by how others around her would perceive the product.  It was about her own internal expectations for what the product could provide to her based on its name - even though it would be a fake.  This distinction is critical in gaining a deeper understanding about how brands and fake products are perceived by some in China.  I'll share more in later posts about this and other issues regarding fake products.

These are just some of the highlights of what I've found.  I'd be curious to hear any of your thoughts on the above examples -- they certainly provide more to discuss than I am able to cover in this single post.  Again, more on these and related topics later.

Copying & Localization: Dairy Queen, Mango Queen, and TCBY

Previously, I shared that not only was Dairy Queen facing an ice cream competitor with the curiously similar name DU, but also facing potential competition from Mango Queen.

Now I'll share that Dairy Queen may have decided that Mango Queen and/or others like it were on to something.  Inside a Dairy Queen in Kunming, Yunnan I saw this sign:

As seen in the center, Dairy Queen now offers two different mango drinks/smoothies.  Given typical tastes for desserts in China, this seems like a reasonable localized offering.  Dairy Queen might not have any competition from Mango Queen in Kunming but mango drinks & desserts are popular at many places.

But even if Dairy Queen corners the mango drink/smoothie market in Kunming, they may still have to worry about some other competition down the street:

Yes, it's TCBY.  I've spotted them in other cities in China as well, however they appear to be fewer in number than Dairy Queen.  In the area seen above I saw at least 4-5 Dairy Queens and 2 TCBY's within a 20 minute walking distance.  Even with that density, I saw one Dairy Queen with a line of customers stretching outside.

As evidenced by the milk tea at TCBY, a popular drink in China, it is clear they've adjusted their menu as well.  All of this goes to show how many American food & beverage companies are localizing their menus in China -- an important thing since Chinese tastes and expectations are different from American's.  I am happy to say, though, that while tastes may differ there is clear evidence that many Chinese share a preference with American's for a key item -- Oreo Blizzards remain a staple in Chinese DQ's.

The various "shared ideas" of Dairy Queen, Mango Queen, TCBY and other dessert places also highlights that the line between inspiration and copying can sometimes be fuzzy.  I'm not equating all such acts and defending plagiarism, copyright infringement, etc., but simply pointing out that there sometimes can be murkiness in these issues -- even from a purely Western perspective.

The issues of copying and localization play important roles for foreign companies doing business in China.  Copyright and trademark issues can be major problems, but to some degree many foreign companies will benefit from their own form of copying, whatever you want to call it, so they can best adapt to the local market.

More on Dairy Queen Inspirations in China

I'm currently having problems accessing the Internet freely and can only connect intermittently.  However, I am not sure that is due to a poor connection in my temporary remote location or Great Firewall issues.  I'll do a quick post while I'm connected.

Previously, I wrote about a Dairy Queen in Guiyang and its neighbor with a remarkably similar name, DU.  However, there exists another example of Dairy Queen's apparent influence in China.  See here:

I saw this Mango Queen last fall in a large central shopping district in Tianjin.  At least it may offer an alternative for those who have been to DQ, or DU, too often.

Want Some Ice Cream - DQ or DU?

A break from discussing China's Great Firewall for something lighter, or maybe creamier is the better word.  In a newer mall in Guiyang, China I saw this:

I've seen numerous Dairy Queen outlets across China.  Although there are some apparent modifications for the Chinese market, they offer much that can be found at Dairy Queens in the US.

However, very close to the Dairy Queen was something I don't think you'll see in the US:

Not a DQ, but a DU ice cream store.  Seeing the DU store in such a relatively high end mall and so close to its, um, inspiration was particularly striking.  One Chinese lady I spoke to said she believed DU to be "a copycat store" but also pointed out that she believed DU was first to open in Guiyang.  While there may be reasonable grounds for a trademark dispute, unlike some KFC copycat restaurants at least DU wasn't exactly copying DQ's offerings.  For example, DU seemed to focus on hard ice cream.

So, the big question -- Did I go for DQ or DU?

Well, I decided to find the middle ground.  In this case it was a store in between DQ and DU where I got this:

A peppermint lemonade drink from the Hong Kong based Happy Lemon chain.  It didn't turn out to be my thing -- I prefer Happy Lemon's milk tea or regular lemonade.  Happy Lemon actually has its own imitators.  However, at least none were within eyesight.

Google Hotel in Vietnam

Recently, I arrived in Hue, Vietnam - the former imperial capital of the Nguyễn Dynasty.  I was excited to explore both its rich historical sites and its delicious local food.  However, something else also caught my attention.  Yesterday, while I was walking down a street I noticed this sign:

I had never heard of a Google Hotel, so I walked around the corner to see if it really existed.  Indeed, not far away I found the Google Hotel:

Later that night, I discovered the hotel appeared to have its own web site -- of course, it's the Google Hotel!  I was particularly intrigued to find that under "Our services" they listed "Nerd water" as a drink for sale.

Well, I knew I had to try some nerd water so I stopped by the next day.  The menu was a bit different from the online version.  The drinks page is here:

Instead of "nerd water" they had "nerd bird can".  I wasn't totally sure I wanted a nerd bird can so I ordered this instead:

After a few sips of the decent 50 cent local beer I asked the Google Hotel staff about the nerd bird can.  They insisted it was very healthy so I decided to give it a try.  Out came this:

It actually had a good taste.  I don't know how to describe it other than that it was completely not like how I'd expect a white fungus bird's nest drink to taste.  Or nerd water.  Regardless, "bird's nest" appears to be a much better English translation for the Vietnamese listings on their menus.  The people I spoke to weren't aware of the meaning of "nerd".  Maybe someone else had a sense of humor...

After finishing the drinks, I took a look around the lobby and saw this:

All those clocks for different cities around the world and no Mountain View clock?  I suspect Google Headquarters would not be pleased.

At least they were providing free internet:

They were also selling Google Hotel raincoats & hats for less than $1 each:

I finally asked why they named their hotel the "Google Hotel".  One replied, "It's a good name!"  Indeed it is.  After some further questioning they pointed to a lady, who I assumed was the manager or owner, and said she really liked Google so she decided to use its name.

That was the end of my visit to the Google Hotel.  I saw no point in staying longer since there weren't any free meals.

Just one more thing...  If you visit the Google Hotel web site you can find this at the bottom of the pages:

"Copy right @ 2010 by Googlee Hotel"

That's priceless.