Web 2.0: Helpless in the Forbidden City

Despite all the hype that the “world is flat” and that the Web is bringing power to the people, when the dust settled over the controversy of a Starbucks in the Forbidden City, power still rested firmly at the top.Starbucks opened a small stand in the Forbidden City in 2000, correctly predicting that weary tourists could use an Orange Mocha Frappuccino during a hot summer stroll through the massive complex. The store has never been without controversy however, and at the close of 2006, prominent TV anchorman Rui Chenggang brought the debate back to life with a respectful post on his blog calling for the store’s removal. Rui’s remarks received immense support online—with 500,000 people signing an online petition he created—prompting the initially calm anchor to proclaim: “The Starbucks was put here six years ago but back then we didn’t have blogs. This campaign is living proof of the power of the Web.” The mainstream media, both in China and internationally, picked up on the story and the debate has since been beaten to death both online and off.

However, what looked like a case study in the power of the Internet to create change has resulted in nothing. I find this development particularly interesting because companies today receive incessant consulting about the Internet’s ability to create crises and negatively affect the bottom line. This particular example has often been cited, with the assumption that the store would eventually close.

Rather than exemplify the power of the web, the Starbucks case demonstrates its impotence; corporate reputation in China is still primarily a top-down model, even if the paradigm may be shifting slightly.

Furthermore, while one could fairly argue that many peoples’ impression of Starbucks may have been tarnished by the online smear, thus harming Starbucks even if the store remains open, there is a corresponding benefit from the massive amounts of free publicity that Starbucks has received, which positively affects the bottom line; the advertising value of the newspaper space devoted to this story, in addition to the positive perceptions garnered from American consumers who probably like Starbucks more for demonstrating its defiance to the job-stealing Chinese, is undoubtedly worth millions. Hence, the key point that the Internet has failed to be the great equalizer and corporate menace that it is purported to be remains valid.

3 Responses to “Web 2.0: Helpless in the Forbidden City”

  1. At the end of this post you state that many Western consumers probably actually like Starbucks more for “it.” Could you clarify why you think that a Western tourist would feel that way?

  2. By “it,” I wasn’t refering to American tourists, I was refering to nationalistic Americans, who I predict would have neutral to positive reactions to articles about Starbucks remaining in the Forbidden City. The reason simply being that many Americans like to see the U.S. “stick it” to China, and certainly don’t like watching the U.S. and our companies bow down to pressure from the Chinese.

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  1. Managing The Dragon - Beta Version » Blog Archive » Perhaps the Web is mighter than previously thought - July 16, 2007

    [...] a former post, I questioned the effectiveness of the online uprising in protest of a Starbucks in the Forbidden [...]