Starbucks in China

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At 7:45 in the morning in a downtown Seattle Starbucks, customers want their coffee to go, and now. Hands clutching cell phones and briefcases fumble to toss the latest Beck CD onto the counter or maybe tuck a pound of beans under the elbow for later.

The Chinese, though, are remaking the "Starbucks Experience."

Mostly eschewing to-go coffees and foods -- and certainly music purchases -- they're opting for in-situ dining on curry puffs and moon cakes during the Chinese Mid-Autumn Festival.

They can sit for hours.

"In Hong Kong and China, coffee is still more of a social event than a daily necessity," said Michael Wu, 34, the managing director of Maxim's Caterers, Starbucks' joint venture partner in Hong Kong, Macau and southern China. "People come to meet their friends and talk."

Wu said that Starbucks has increased the size of the stores he oversees in Hong Kong and in China to around 2,000 square feet, to accommodate all of the lollygagging chatters.

It is a testament to the "Third Place" concept, often used by Chairman Howard Schultz to describe Starbucks -- that home away from home where, for a premium, the host serves you coffee and offers up CDs and candy, too.

In the United States, though, Starbucks revenue is driven by the speed and frequency of its transactions, as people grab their coffee, and maybe a sandwich, before scurrying out the door to their next appointment.

But in the five years that it has operated in Hong Kong, Starbucks has come to be viewed as a destination restaurant rather than a coffee take-out joint, helped by Maxim's Caterers' experience as Hong Kong's largest catering conglomerate.

"The Chinese especially, they mostly cannot drink coffee alone, it must go with food," said Wu, explaining the generalized Chinese notions of coffee that Starbucks is hoping to transform. "That's why our sales per customer are higher than in the United States -- they buy food with their coffee."

Wu said that less...
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