Bringing “DOUBLE DOUBLE” To China: 3 Opportunities and Watch-Outs for Tim Hortons

During the 2006 Winter Olympics, Tim Hortons launched a series of “Every cup tells a story” commercials. I still remember the one that told a story of an Asian father and son: watch the commercial here.The commercial portrays a father who was very strict when it came to his son putting studying ahead of playing hockey. Fast forward decades later, that same boy is now a father cheering on his own son at a hockey game. During the game, his father unexpectedly shows up to the hockey game with two cups of Tim Hortons double double coffees. It turns out that the father would secretly come watch his son play hockey.

The commercial resonated with many Canadians, including Asian-Canadians, who have embraced “hockey” & “double-double” as part of their life here in Canada.

Expanding into China

To capitalize on China’s population, growing economy and flourishing coffee culture, Tim Hortons has announced a 1,500-store China expansion over the next decade. Read more here.

How does Tim Hortons ensure that the brand stays true to its Canadian roots while finding a way to resonate with Chinese consumers who may not understand the appeal of “hockey” or what a “double double” cup of coffee means?

We’ve identified 3 opportunities and watch-outs for Tim Horton’s China expansion:

#1: Emerging Yet Saturated Coffee Market

Opportunity: The coffee consumption culture is flourishing in China, especially among the middle class and younger generations, who represent significant consumption potential coupled with a strong appetite to experience global brands.

Watch Out: Tim Hortons announced that it will first focus on opening new stores in Shanghai and Beijing. Both markets are highly developed and saturated with several domestic and international coffee brands already set up in prime locations. For instance, in Shanghai, the distance between Starbucks stores is less than 100 metres. The high concentration of locations and well-established brand reputation among existing players will make it hard for Tim Hortons to “steal” market share from brands such as Starbucks and Costa Coffee. Location, location, location will be key.

#2: Value Proposition and Brand Positioning

Opportunity: The Chinese-Canadian community is the second largest visible minority in Canada – many of which are advocates of Tim Hortons. They also have friends and families in China that they frequently communicate with whether through text messaging, email, phone calls or video calls (think: We Chat). There is an opportunity for Tim Hortons to leverage existing brand advocates within the Chinese Canadian community to better understand how to communicate the Tim Horton’s brand in China. A good place to start is by identifying which rational and emotional benefits will versus will not resonate with Chinese consumers. The benefits that resonate in North America may not resonate in China.

Watch Out: Tim Hortons brand positioning in North America is a personality-based positioning centred around a professional Canadian hockey player: Miles Gilbert “Tim” Horton.  How the Tim Hortons brand translates its brand story to resonate with Chinese consumers will be one of the key success factors for its Chinese market entry.

#3: Product Localization and Technology Innovation

Opportunity: Chinese consumers are considered especially technologically savvy, with the country’s infrastructure having adopted some of the most advanced technologies. How Tim Hortons will leverage technology as part of its consumer experience (e.g., online ordering + in-store pickup, delivery services via third party platforms), build its payment system (e.g., McDonald’s and Starbucks accept WeChat pay in China), and engage with Chinese consumers (e.g., WeChat Channel, WeChat Mini Programs, etc.) will be very interesting.

Watch Out: Successful global brands actively cater to Chinese consumers’ unique appetite by offering local food items. For instance, McDonald’s offers congee as part of its breakfast menu; KFC provides rice instead of french fries with its chicken dinner combos. Even with the most advanced technology offering, missing the mark on understanding and customizing to local tastes, flavours and behaviours will be a deal breaker.

Conclusion:

While Canada’s Chinese communities have embraced Tim Hortons, only time will tell whether the values and roots of the Canadian coffee chain brand will resonate in China and rise to the top against some of the already established players in the Chinese market.

“Double double” may indeed mean something to the Chinese consumers in the future!


By: Hua Yu, Managing Partner

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