Shaoyang, China: Unknown City May Welcome Starbucks in the Future
February 22, 2016
Shaoyang, the city located 150 miles southwest of Changsha, is slowly, very slowly, turning global. Though there is no Starbucks store in the city yet while wealthier Changsha residents enjoy its coffee at one of 22 available stores in the capital of Hunan province. The city of Shaoyang is widespread but once you walk off from the center, you would soon step into the dusty street toward rural villas where you may see numerous chickens as well as ducks walking throughout the farmland. Certainly, its economy is not as handsome as Shanghai or Changsha. However, the city has just welcomed the first-ever bullet train services from major big cities in mainland, including global Shanghai. In the meantime, the world-largest fast food franchise, McDonald’s, has been welcoming modernity-looking consumers from its populous 8 million residents over a past decade. With such environment, premium Starbucks may be interested in entering this city in the near future.
Statistically, Shaoyang’s economy is not impressive. While its population in the city is very populous at 8 million, per-capita GDP of the city is just 17,498 yuan or US$2,683.25 (2014 data) according to Shaoyang Statistics Bureau. That is far below Changsha’s income per person of 99,570 yuan (2013 data) or about one-tenth of Shanghai’s. With that in mind, McDonald’s BigMac Meal at 29RMB or US$4.45 (according to the exchange rate on February 19, 2016) is quite considered to be an expensive food to purchase for the average residents. If Starbucks store opened in the city one day, it would definitely surprise the local residents while displaying premium prices of its beverages. Like other cities in China, Shaoyang also offers local food and beverages. One of popular food in the city is probably the grilled squid skewers. It is very delicious and, of course, spicy while costing local residents only 2RMB per stick. Or stepping into a local restaurant in the city, you can enjoy a bowl of noodle soup at just around 10 RMB. Why is this article being written despite such poorer economic condition in the city?
New Bullet Train Services to and from Shaoyang
Because it turns out quite interesting if you can really physically step into the city and feel it yourself. Except big cities, like Shanghai, Beijing, Chengdu, Shenzhen and so on, probably more than hundreds of cities in China are like Shaoyang, where majority of Chinese people live and most immigrant workers in those big cities are actually from such mid-tier cities. However, Shaoyan is a little different from the other mid-tier cities. Thanks to an inaugural bullet train service at Shaoyang South Station in the end of last year, people’s mobility between the city and the provincial capital, Changhsha, as well as coastal big cities, like Shanghai and Shenzhen, greatly improved. The bullet train service from Changsha to Shaoyang takes only one hour while the fare ride is 81.5 RMB. On the other hand, the bullet train ride from Shanghai to Shaoyan takes about seven hours at 560RMB in Coach class.
Newly-opened Shaoyang (L) and Shaodong (R) stations. Shaoyang station has a modern looking. Since it is the terminal station, it is more crowded than Shaodong station, where one stop in front of Shaoyang. Shaodong station, on the other hand, is located a little off from the center. However, an international hotel (actually is not an international branded hotel, but the name says) is located nearby the station.
Once you step out of the train station of Shaoyan, first thing you will see is the modern building of the train station itself on the vast common area. Then, foreign tourists start to get nervous about the transportation service to tonight’s accommodation place unless you have a welcome ambassador. Otherwise, you will talk to a local taxi driver with your fine body gestures against a non-English speaking local driver. If you are lucky enough, you get less than 15RMB to reach your hotel, otherwise have to pay a foreigner-only price or simply walk down to the hotel (in fact, not really bad to walk down to a hotel if it is located in the center. It may take about 15 minutes or so by walking the main street, which actually connects between the station and the downtown area).
While the train service is highly intact now in the city, McDonald’s has been welcoming the residents of Shaoyang over a past decade. Thanks to its globally well-known name, McDonald’s Shaoyang is one of the popular Western cultural spots for young city residents to enjoy one of a few available American meals and beverages in the area. Unlike global Shanghainese (Shanghai people), customers in McDonald’s Shaoyang tend to order chicken-related items because chicken yields the best among every residents of Hunan. Most Hunan residents express that their favorite meats are always chicken.
Just two decades ago in greater Hunan province, only wealthier families could obtain beef. One of employees of Shanghai-based American online payment company, who grew up in Shaoyang city, told that the beef was an unobtainable food when she was a child. One day, her parents had brought a fat part of beef from the market. Then, she tried to reach her arm to it on the table and wipe it by her small finger to taste it. It was the first time she tried to taste the beef in her life and she always remembered the moment through today.
Clockwise from (TL) only one McDonald’s in Shaoyang has been serving its customers over a past decade. (TR) Inside the store, most customers are young and some enjoy the most recent iPhone 6S series while eating. Chicken-related meals tend to be popular among Shaoyang people. (BR) It is a typical fake restaurant in China. These three Chinese characters translate “McKentucky.” (BL) A real KFC store in Shaodong district under Shaoyang city. Thanks to KFC’s first mover advantage in mainland China, every local people knows the name. Tip: since KFC and McDonald’s tend to be well known and located in the center, you can ask a taxi driver those names for a direction.
Still beef is an expensive item in the province and also an unfamiliar item for the residents. In McDonalds Shaoyang, BigMac meal (BigMac, medium fries and soda) costs 29RMB, which is reasonable for foreigners but relatively expensive for the local people. Fried Chicken sandwiches, local residents’ favorite, on the other hand, costs 24RMB. When you look at menu board in the store, you will realize that there are numerous chicken selections. One of best selling items in McDonald’s Shayang would be the friend chicken pack, which contains a dozen of fried chicken and nuggets as well as two sodas and nicely valued at 72RMB. It may confuse you how this McDonald’s resembles KFC, whose residency status is much longer than any other foreign franchise families.
Real Face of Shaoyang
Despite the lower than the average per capita income level in the city, there would be a large number of outliers among the 8 million residents in the city. I annually meet up with Melon (her English name), one of high school students in the city, and I was once invited to her home for tea last year. Her family is relatively wealthy and lives in the top floor of the high-rise apartment, or commonly called a house in China, where you can enjoy the decent view of the Zishui River and the city. The decoration of the house is rich while a dozens of expensive furniture nicely spread across the huge living room. After knowing her father was an owner of the local factory, it is no reason that her family or modernity-looking Melon can be a soon-to-be Starbucks customer as soon as it opens in the city.
(L) Like New York and San Francisco, Shaoyang city also offers a bike share program among local residents. (C) People’s Bank of China branch building at Shaoyang city. (R) Some outliers live in a luxuriously furnished house in Shaoyang and those people are likely to be Starbucks customers when it opens in the future.
An iPhone attainability is a nice barometer when looking at local people’s wealth. Customers in McDonald’s tend to have a newest iPhone while taking advantage of free wifi in the store. With income per capita of just 17,498 RMB in the city, average local people have to spend one-third of the annual income to obtain the premium iPhone. It does not make sense for them to spend such money. Rather only outliers have a chance to attain the expensive modern product. Those outliers are definitely growing, and those people are probably going to occupy Starbucks tables once it opens.
Next Starbucks in Shaoyang?
During my one-day trip in Shaoyang during February, Starbucks logo was displayed in Apple Map on my iPhone. That brought me a great interest to walk down to the location if there was one in the city although my preliminary research did not find any Starbucks stores around the area. My research was intact and there was no Starbucks store at the location and it was a vegetable store.
Earlier this year, Starbucks announced that the company would add 500 stores in mainland China each year through next five years from the current 2,000 stores. More stores are expected to join big cities, like Shanghai. However, the company has been really focusing on inland cities, like Chengdu, Changsha, Xi’an and so forth. The company surely knows the local economy as “Starbucks as a lens on almost every community,” Howard Shultz said in TIME magazine. That being said, the company should have learned the greater improvement in the people’s mobility between big cities and Shaoyan, McDonald’s decade-long presence in the city, and growing middle-class across the neighborhood. A city like Shaoyang is possibly a great candidate for a new Starbucks store opening out of the annual 500-store addition in coming years.
GDP per capita Shaoyang: sytj.gov.cn
GDP per capita Changsha: hntj.gov.cn
GDP per capita Shanghai: sh.gov.cn
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