Starbucks in Denpasar, Indonesia: Friendly Green Oasis Indulges Foreign Tourists
August 11, 2015
The Sun sets slightly after six o’clock in the evening at Kuta beach, where global tourists and local residents seem to enjoy this moment each day. Soon after the beautiful sunset, tourists on the beach start to head back to the streets for tonight’s dinner while local residents and workers on the beach prepare to head back home. In the meantime, green mermaids turn their lights on to attract them to one of three available Starbucks stores right in front of the beach. Most stores are still quiet but every moment passes by a group of tourists continues to occupy from one table to another. By the late evening, Starbucks stores around this area are in full swing but there is no such business atmosphere. Everyone enjoys chatting peacefully to conclude a finest day in Bali Island.
Indonesia is very populous at 253 million, compared to the Philippines’ 98 million or Vietnam’s 90 million. It is truly the most populous economy in the Southeast Asia region or the third largest within Asia after China and India (excluding less-economic sensitive Bangladesh). Per capita GDP, or known as annual income per person, of Indonesia is about US$3,500 (in 2014) according to World Bank Data. That number may not sound impressive in Asia, where per capita GDP of the world’s second largest economy, China, and a tourist-oriented Thailand stand at $7,594 and $5,561, respectively. However, looking at a closer economy from the country, the Philippines’s per capita GDP is at a $2,700 level. By looking closely at GDP growth rates of those countries on the other hand, they grow solid 5 percent while major developed economies struggle to fuel the economic growth.
According to Starbucks Investor Relations, there are 198 stores available throughout Indonesia while 244 and 211 stores available in the Philippines and Thailand, respectively. At this moment, Indonesia’s Starbucks store count is ranked third place after those countries or ahead of Malaysia’s 184 stores. While their population sizes vary, it seems Starbucks stores spread nicely around this Southeast Asia region. As a tourist, Starbucks in such tropical region is probably one of the finest places to cool down and relax with icy Frappuccino in hand.
Starbucks in Denpasar
Once you step into one of Starbucks stores in Denpasar or Bali Island, what you are likely to notice is that the employees (or called “partners” among employees) are very friendly. As Bali is a travel-oriented island, people tend to communicate to make each other pleasant. Most global tourists realize that how they are treated very well whether they stay at reasonable Holiday Inn Express or luxurious Conrad. Starbucks is not an exception. When I stepped into Starbucks Pantai Kuta Bali store after checking out Holiday Inn Express Kuta Square in the morning, friendly Starbucks staff warmly welcomed me.
Putra, a young Balinese Starbucks employee, stepped up to me and kindly asked me should I need any support. While I knew to get a cup of coffee anyway, I was hardly determining what mugs to get. It is one of my hobbies to collect Starbucks mugs across the globe, and I believe many Starbucks fans do so as well. He suggested me to join Starbucks Rewards program so that I could get a complimentary beverage in addition to another free drink along with a purchase of a mug. Thus, I got two complimentary beverages and luckily I was also selected for a Starbucks Survey, which gave me another complimentary beverage upon submitting the survey online. After all my purchases were settled, a group of American ladies appeared the store and one of them was from Starbucks headquarter in Seattle. It was always a surprising moment that Starbucks allowed me to meet new people from around the world.
(L) Putra in the center is a friendly Starbucks staff at Pantai Kuta Bali store. A young lady on the right visits this store with her friends while she works for Starbucks headquarter in Seattle. (C) In the morning, most Starbucks stores in Bali are quiet. The picture is also Pantai Kuta Bali store. (R) In the evening, many foreign tourists walk on the street to look for a place to sit back, relax, and chat to conclude a finest day in Bali.
Price of everyone’s all-time-favorite Caramel Macchiato (Tall size) in Denpasar costs 53,000 IDR (Indonesian Rupiah) or US$3.93 (exchange rate as of August 1, 2015. The value of this Indonesian currency has continued to appreciate against U.S. dollar for past several years) while tall-sized brewed coffee, for instance, costs 25 IDR or US$1.85, which is slightly below the price of US$1.95 of the same product in San Francisco (Please note that prices of Starbucks products in the United States may vary depending on places). For a better comparison, prices of tall-sized Caramel Macchiato in Vietnam and Thailand cost US$3.67 and US$3.84, respectively. It seems like prices are not much different among those countries or the prices are nicely set between the ranges of exchange rate fluctuation among those economies’ currencies against U.S. dollar. In the meantime, a price of tall-sized Caramel Macchiato in mainland China, if anyone is curious, is 31 RMB or US$4.99 (as of July 2015), which is significantly higher than the prices in those countries.
Although the Caramel Macchiato in China is exceptionally expensive, it is even more expensive for local Indonesian people, who earn $2,700 annually or just $225 monthly on average. With that in mind, Indonesian people can enjoy only 57 cups of Caramel Macchiato a month while the wealthier Chinese can enjoy 127 cups of the same product. For instance, a bottle of coke costs 7,000 IDR in Denpasar or a meter taxi ride from Ngurah Rai International Airport (DPS) to Kuta beach costs less than the price of Caramel Macchiato while foreigners would never get that taxi fare from the airport. Plus, the local people would not drink hot beverages and would prefer having icy Frappuccino, which is more expensive than tall-sized hot Caramel Macchiato.
Since most Starbucks customers in Denpasar are foreigners, especially in Kuta beach area, it is in fact hard to analyze how local people are familiar with Starbucks’ products and services. Honestly speaking, I was not able to find any local customers and never knew what Starbucks beverages they liked to enjoy. Morning period is especially quiet. Foreigners tend to head to enjoy the beach side rather than sipping coffee indoor. Local residents on the other hand are probably the same to head to the beach side or nearby streets to welcome foreign visitors. In the meantime, it is possible that local people may feel Starbucks products are expensive. Rather they enjoy other substitutes at more reasonable local cafes instead. One thing I truly noticed was that icy Frappuccino drinks were placed at almost every table in the crowded evening and those colorful drinks were nicely matched with the beach right across the street.
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