Strategy

Starbucks China makes buying mandatory for a seat in all 8,000 stores

Starbucks China now requires a purchase before customers can sit, across all 8,000 stores, as Luckin Coffee pressures its second-largest market and a $4bn Boyu deal reshapes the business.

By Grace Kim

3 min read

Updated

No purchase, no seats: Starbucks China rolls out new policy
No purchase, no seats: Starbucks China rolls out new policyNils Huenerfuerst / unsplash

What's News

  • Starbucks China's purchase-to-sit policy took effect Thursday across all 8,000 stores.
  • Luckin overtook Starbucks as China's largest coffee chain in 2023.
  • Starbucks agreed last year to sell a 60% stake in its China business to Boyu Capital in a $4bn (£3.04bn) deal.
  • Starbucks entered China in 1999; it is the company's second-largest market.
  • Starbucks China said on Wednesday it will add staff and improve digital systems for peak-hour service.

Starbucks China now requires customers to buy something before they can sit down. The rule took effect Thursday across all 8,000 of its stores on the mainland, ending the company's long-standing tolerance of non-paying occupants in a market that accounts for its second-largest business worldwide.

The company framed the change as an upgrade to what it calls the "in-store experience" for paying customers. It comes amid stiff competition from homegrown brands, above all Luckin Coffee, which overtook Starbucks as China's largest coffee chain in 2023.

Reports of the new policy circulated this week, along with social media videos showing what appear to be "purchase to sit" signs inside Starbucks locations. The rollout landed with unusually warm reception online — many on Chinese social media welcomed the move.

What are customers saying?

One of the top-liked comments on Weibo left little doubt about the frustration the policy addresses. "Finally, there won't be peak periods where people are just sitting there not ordering anything, drinking Luckin coffee, playing games and yelling on the phone," it reads. "Every time I walk around, there's nowhere to sit."

Another Weibo user took a more measured line: "There's nothing wrong with it. I'd feel awkward sitting there if I didn't make a purchase. I'd rather leave the seats for those who made purchases and need the seats."

In short: the policy solves a real problem for paying customers, at least judging by the loudest voices on the platform.

Is this part of a global pattern?

Yes. Starbucks stores around the world have been wrestling with non-paying seat-hoggers and other undesirable behavior from customers.

Last month, a Starbucks store in Sichuan province sparked debate after video of its chained-up outdoor seats and tables circulated on social media. The move appeared aimed at blocking people from sitting without paying.

In South Korea, Starbucks has told customers to stop bringing "bulky items" into its stores, after some patrons reportedly hogged seats while hauling in printers and desktop computers.

In North America, the chain reversed its open-door policy, which for years allowed anyone to use its seats and toilets without buying anything. Starbucks said it wanted to "prioritise" paying customers.

The through-line is consistent: the era of the free seat, once core to the brand's "third place" positioning, is closing market by market.

How much pressure is Luckin applying?

China has been Starbucks' second-largest market since the company opened its first store there in 1999. But local rivals have spent recent years chipping away at that position with cheaper products.

Luckin in particular offers a robust app-based ordering system built around grab-and-go transactions. That model directly challenges Starbucks' traditional full cafe experience, where people sit down and enjoy their food and drinks.

The competitive math forced structural change. In 2023, Luckin overtook Starbucks as China's largest coffee chain. Starbucks said last year it would sell a 60% stake in its China business as part of a $4bn (£3.04bn) deal with investment firm Boyu Capital.

What comes next?

Starbucks China isn't stopping at seat rules. In a statement on Wednesday, the company said it plans to increase staffing and improve digital systems at its stores, among other investments, to "ensure customers receive timely and warm service even during peak hours."

The message is clear: under new ownership structure and with Luckin setting the pace, Starbucks China is trading its old anything-goes cafe culture for speed, seats for payers and tighter operations.

Source: BBC Business

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Grace Kim

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Market editor covering people, launches and day-to-day practice in entrepreneurship, startups and venture funding at Business Bearings.

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