Starbucks adjusts pricing strategy in China to stay competitive

Starbucks said Monday it will cut prices on some of its iced beverages in China by an average of 5 yuan, or about $0.70, beginning Tuesday, as it seeks to stay competitive in a rapidly evolving market.

The move comes amid growing consumer caution and intensified rivalry from lower-cost domestic brands.

In a post on its Weixin social media account, the U.S.-based coffee chain said it will offer more "accessible" pricing on dozens of drinks, including non-coffee options and Frappuccinos. Some items will now be priced as low as 23 yuan.

China is Starbucks' second-largest market after the United States, but economic uncertainty and job insecurity have made consumers more price-sensitive. Meanwhile, rivals such as Luckin Coffee and Cotti have offered drinks at prices as low as 8.8 or 9.9 yuan.

With the help of vouchers and promotions, Chinese consumers can sometimes get coffee for just 2.9 yuan.

Starbucks had previously said it would avoid a price war. Still, it has introduced smaller drink sizes and issued coupons to attract customers.

The company is also exploring ways to revive its China business, including potential stake sales as it adapts to the increasingly competitive landscape.