Weekly payment volume dropped by more than 8 billion won ($5.3 million) in the week following controversy over its ‘Tank Day’ event, according to Mobile Index, a data-driven mobile app intelligence platform operated by South Korean AI tech company IGAWorks. South Korea is Starbucks third biggest market internationally.
"While sales are not our main concern at the moment, we have seen a very significant drop," a Shinsegae official admitted at a Seoul press conference last week.
It's a crisis that brand experts say was entirely avoidable. "Brands love talking about localisation, but many still treat it as making small adjustments to visuals or language rather than truly understanding the culture they are entering," Jacob Benbunan, CEO and co-founder of Saffron Brand Consultants, tells Campaign Asia.
"The problem here is not that a campaign offended people, it's that one of the world's biggest consumer brands failed to recognise the emotional weight attached to a date and symbol that many Koreans would immediately associate with national trauma."
The campaign in question attempted to promote large-sized tumblers of the Tank Series, declaring May 18 to be Tank Day; coinciding with the anniversary of a democratic uprising in the southern city of Gwangju that was brutally suppressed by troops, tanks and helicopters killing or injuring hundreds. Starbucks Korea initially clarified that the Tank Series was one of several tumbler series rolling out in a campaign running from May 15 to 26.
The promotion was met with immediate outrage, and within hours, Shinsegae, the parent company whose hypermarket Emart subsidiary owns 67.5% stake in the coffee chain, apologised for "inappropriate marketing" and fired the chain's chief executive, Sohn Jeong-hyun.
“All members of the Shinsegae Group, including myself, will remember the history and sacrifices of our society and strive to deeply understand and respect the feelings of the people,” Chung said, adding that people should not take out their anger on Starbucks employees.
Chung Yong-jin bowed three times during the televised apology, his second since the incident.
The nationwide backlash that followed refuses to quell. Reports estimate that hundreds of demonstrators were killed in Gwangju on May 18, 1980. Investigations into the massacre later confirmed that troops deployed by the military regime of Chun Doo-hwan committed rape and sexual assault. Since then, May 18 is depicted in films and Korean television as a day of national trauma, and is commemorated annually as a sacred day of democracy.
The campaign compounded outrage further by using the slogan "Thwack it on the table!" — widely read as a reference to a notorious 1987 police statement that attempted to cover up the torture death of student activist Park Jong-chol. Police had claimed that Park died suddenly after investigators "hit the desk with a thwack."
Starbucks runs over 2,000 stores in Korea. Anger over the campaign has triggered public calls for boycotts, amplified by government officials, including Interior and Safety Minister Yoon Ho-jung, who said Starbucks products will no longer be used at government events and lamented the chain’s “anti-historical behaviour”. South Korean delivery workers, the Delivery Platform Workers Union said that its members would begin refusing Starbucks delivery orders, describing the campaign as an "insult" to the legacy of one of South Korea's most sacred democratic milestones.
President Lee Jae Myung, who had attended the Gwangju memorial that day, condemned the campaign on X. He said he was “outraged” by the behaviour of “low-class peddlers” – and said those responsible for the promotion must be held accountable. The Gwangju-Jeonnam Memorial Coalition called the marketing “clearly malicious mockery”, adding: “We strongly suspect this is the result of management’s biased historical consciousness … being cunningly expressed through the mask of marketing.”
Benbunan tells Campaign that the path forward for the coffee giant is narrow but not closed. "Pulling the campaign and apologising is only the beginning. Starbucks and Shinsegae have reacted seriously, but people judge brands less by the scale of the response and more by whether it demonstrates a genuine understanding of why the mistake mattered in the first place. If it doesn't, people will lose trust immediately."
"For Starbucks, this is probably not irreversible, but a reminder that familiarity does not equal immunity. The more present a brand is in people's daily lives, the higher the expectation that it understands the culture around it. Global brands often think consistency builds trust, but knowing your audience is still the number one rule. The companies that localise well are usually the ones willing to spend time close to the culture, not just market to it from a distance."
Starbucks has been in South Korea since 1999. Korea is its third-largest market by store count and revenue, trailing the United States and China.
