Starbucks in China is becoming huge. 500 shops in China, and they’re doing better than shops in the US in terms of profit. Yes, labor and material has to be much cheaper for this to be so, if it’s also written that its sales are considerably lower!
They can also charge more in China. According to USA Today, “Carrying a Starbucks cup is seen as a status symbol, a way to demonstrate sophistication and the capability to afford a personal luxury for the up-and-coming middle class in China.” (USA Today – Starbucks) No matter how it’s working, it’s actually becoming a bigger success as compared to many fast food outlets who focused on speed and efficiency over comfort and luxury – which is what some of China wants.