China CCTV Takes a Swing at Starbucks and Misses

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When a report from China Central Television, China’s state broadcaster, came out in October, blasting Starbucks (NASDAQ:SBUX) for charging higher coffee prices in China than in Britain, onlookers were initially interested to hear how how the report would affect Starbucks’s business in China, one of the company’s most important markets. Thanks to a growing middle class in the country, Starbucks, along with many other businesses, have worked hard to initiate success in the retail gold mine that is China, and some speculated that the harsh report from CCTV would hinder the coffee giant’s potential for gains.

As it turns out, however, a report from Reuters illuminates that CCTV actually ending up shooting itself in the foot, rather than shooting down Starbucks, because its October segment on the coffee chain was lambasted by Chinese Internet users and economic experts, and as it turns out, even employees at the company didn’t agree with the broadcaster’s reporting.

CCTV has been known to go after foreign companies for their prices and services in China, because the broadcaster recognizes that the country is an important market for many, and takes advantage of the fact it can make accusations from far away while never criticizing its own, more vulnerable companies. Apple (NASDAQ:AAPL), Samsung Electronics (SSNLF.PK), and Yum! Brands (NYSE:YUM) are among the major companies that have come under the CCTV spotlight, and Zhan Jiang, a journalism professor explained via Reuters, “Criticizing foreign companies is very safe. Leaders don’t pay attention to it, people will support it, and it won’t bring the network any trouble.”

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