Starbucks Korea is currently navigating one of the most severe crises in its operational history, following a controversial marketing campaign widely perceived as mocking South Korea’s pivotal democratization movements and the victims of past state violence.
This significant marketing controversy has ignited a nationwide backlash, leading to executive dismissals, official police complaints, and intensified scrutiny over the complex ownership structure shared between Emart, a key retail entity of Shinsegae Group, and Starbucks’ US headquarters.
- May 18: Starbucks Korea launches a promotional campaign for its “Tank” tumblers, utilizing phrases such as “Tank Day” and “Slam on the desk.”
- May 18: Widespread criticism erupts across online communities as these phrases were interpreted as evoking military suppression by the military government in the 1980s. Specifically, “Tank Day” recalled the military tanks deployed during the historic May 18 Gwangju Democratic Uprising, while “Slam on the desk” was reminiscent of the dictatorship-era’s attempts to conceal the torture death of student activist Park Jong-chul in 1987. Starbucks Korea swiftly withdrew the campaign and dismissed CEO Seon Jeong-hyun. President Lee Jae Myung publicly condemned the marketing initiative.
- May 19: Shinsegae Group Chair Chung Yong-jin issues a formal apology. Starbucks’ US headquarters also releases an apology, labeling the promotion an “unacceptable marketing incident.”
- May 26: Chairman Chung bows in apology during a press conference, pledging to take full responsibility for the ongoing controversy. Shinsegae simultaneously announces that it found no definitive evidence proving the marketing proposal had been made with the deliberate intention of referencing the democratic movements.
How did the “Tank Day” marketing campaign receive approval?
- Starbucks Korea’s commerce team initiated and proposed the contentious marketing campaign. It subsequently passed through multiple layers of approval, including its team leader, manager, division leader, and ultimately the CEO. No objections were raised during this approval process.
- Employees from the commerce team, responsible for conceptualizing the phrases, claimed they aimed for wordplay with similar-sounding terms. They also stated that artificial intelligence tools were utilized for generating marketing ideas, and they did not foresee the phrases causing any controversy.
- Remarkably, some executives failed to even open the attached campaign images during their review. Furthermore, the legal team reportedly skipped its review due to the perceived urgency of launching the campaign.
- Several civic groups have lodged formal police complaints against Chairman Chung and Starbucks Korea’s former CEO, citing allegations that include the defamation of the historic May 18 Gwangju Democratic Uprising.
- In response to the growing public outrage, consumers are actively uploading videos depicting the destruction of Starbucks’ tumblers and merchandise as widespread boycotts intensify.
- Shinsegae vows to fully cooperate with the ongoing police investigation, pledging to hold those involved in the incident accountable should they be found guilty.
- Amid severe public backlash, Starbucks Korea will allow customers holding prepaid cards to receive full refunds, regardless of the card’s loaded amount, from June 1 to 14.
- Starbucks Korea represents a critical profit source for Emart, which currently holds a substantial 67.5 percent stake in the venture.
- In 2025, Starbucks Korea reported record-breaking sales of 3.24 trillion won ($2.16 billion) and an impressive operating profit of 173 billion won.
- Crucially, under the existing licensing agreement between Emart and Starbucks Coffee International, Starbucks retains the right to repurchase Emart’s significant 67.5 percent stake. This repurchase could occur at a 35 percent discount to a mutually agreed, fair valuation, specifically if this marketing incident is determined to be Emart’s liability, leading to the termination of the contract.
