What Chance Does Tim Hortons Have in China
Below are excerpts of an article originally posted on Campaign Asia. Read the full story here.
Given China’s crowded and innovative coffee and quick-serve food market, we asked branding consultants what the Canadian coffee and quick-serve food outlet should think about as it enters the mainland.
Benoit Garbe, senior partner with brand and marketing consultancy Prophet, said that Canada Goose is an instructive example. It has a clear story and a clear linkage between an inspirational image of Canada and its brand and product. By contrast, the values of Tim Hortons, as well as the emotional attachment many Canadians have built with the brand from childhood to adulthood, could be hard to duplicate and translate into China.
“To compete effectively in China, Tim Hortons needs to localize its approach and understand how to cater its offer, experience and brand to the new, more demanding and discerning Chinese consumers,” agreed Garbe. Moreover, consumers’ rising expectations for more premium experiences, healthier alternatives and hyper convenience must be key considerations, he added.
“Will Tim Hortons build its brand, retail and digital experience with consideration of these new consumption habits?” Garbe asked. “Will they introduce delivery services? These require high logistical and value-chain investments, which large brands like Starbucks and KFC have taken on, yet are still piloting or deploying at the moment.”
Pricewise, there’s a risk Tim Hortons could get lost in between its two main competitors. “Starbucks [has] the high ground, raising the bar even higher with Reserve and Roastery stores,” Garbe said. “Luckin [is] the perfect low-cost disruptor, giving great value, a brand aura, a chic experience, yet at much lower price. I always struggle with brands in the middle, as they do not show a meaningful alternative, and I wonder where Tim Hortons sits.”
“Being somewhat of a late-comer with a positioning that is family friendly, though mass, it does not come across as truly inspirational, experiential or millennial centric, especially compared to Starbucks and Luckin Coffee,” Garbe said.
Prophet doesn’t see the trade war really trickling down into consumers’ perceptions and brand choices, at least not yet. “However, local brands have done a much better job at being relevant to Chinese consumers,” Garbe added. “One could argue that the rise of Chinese brands is more supply-led than consumer-led. Even though we also see a sense of pride in buying Chinese brands, the Chinese consumer is pragmatic, and only buys Chinese if the product and service is seen as better value.”