In China, Western brands face a tough challenge to win over customers. The changing tastes and competition from local Chinese companies are forcing American and European companies to adapt to new strategies in the world’s second largest economy.
Big names like Starbucks and Apple are not only facing competition but also adapting to the new reality of Chinese consumer preferences. Coca-Cola, for example, has launched over 30 new drink brands in China in the past six months, a significant shift from its previous reliance on the strength of its brand.
Starbucks, with about 3,000 stores in China, experienced a sudden slowdown in growth due to growing competition, such as Luckin Coffee. Starbucks is now trying to catch up by partnering with Alibaba for delivery services.
Automakers are also racing to keep up with changes in China’s auto market, especially in electric vehicles. Renault, for example, is facing competition from both traditional rivals and new Chinese upstarts like Nio, which offers cheaper alternatives to Tesla’s models.
Apple, on the other hand, has been losing market share in China to local rivals like Huawei and Xiaomi. Analysts estimate that the iPhone accounts for less than 10% of smartphone sales in China. Despite introducing new features like dual SIM cards and larger screens, analysts are skeptical if it will be enough to compete in the Chinese market.