BEIJING, June 9 (Reuters) - Starbucks China

will lower the prices of some of its iced drinks by an average

of 5 yuan ($0.70) across the country, the company announced on

Monday, as competition intensifies and consumers become more

cautious about spending.

In a post on its Weixin social media account, the U.S.

coffee chain said it would offer more "accessible" prices on

dozens of its drinks, including non-coffee drinks and the

Frappuccino, from Tuesday.

While China is Starbucks' ( SBUX ) second-largest market after

the U.S., the coffee market is highly competitive and consumers

have become more cautious about spending because of the slowing

economy and concerns about job security.

The new approach means some of Starbucks' ( SBUX ) drinks will be

priced as low as 23 yuan, the post said.

Domestic rivals such as Luckin Coffee and Cotti have

priced their drinks as low as 9.9 or even 8.8 yuan, while

deep-pocketed internet companies JD.com ( JD ) and Alibaba

Group ( BABA ) have entered the food delivery market, adding to

the competition. With offers and vouchers, Chinese coffee

consumers can buy themselves a drink for as little as 2.9 yuan.

A person close to Starbucks ( SBUX ), said the company was not

reducing prices in response to intense price competition, but

looking to attract more customers in the afternoon.

The individual requested anonymity as they were not in a

role that allowed them to comment to the media.

"Starbucks ( SBUX ) likely has a longer-term strategy, which is

to focus on the demand for non-coffee items in the afternoon

among consumers," the source said.

Starbucks ( SBUX ) had said previously that it would not engage

in a price war. However, it has also introduced smaller-sized

drinks and issued coupons which have

lowered prices for customers

.

The U.S. giant has also been looking to revive its

business in China via

selling stakes in the business

.

($1 = 7.1870 Chinese yuan renminbi)