By Muneerah Bee
Starbucks Corporation recently presented the company’s key drivers that will fuel China’s market growth over the next five years at its first-ever China Investor Conference.
Through the company’s purpose-driven growth agenda in China, Starbucks said it is focused on enhancing its immersive, coffee-forward approach to elevating the third place (between work and home), building deeper customer relationships in digital and extending the Starbucks experience to the on-the-go and at-home consumers.
Supported by these initiatives, the company announced plans to build 600 new stores annually over the next five years in Mainland China – a goal that will double the market’s store count from the end of FY2017 to 6,000 across 230 cities. The company also announced plans to more than triple revenue and more than double operating income in China by the end of FY2022, relative to FY2017 levels.
“The power of our brand in China, the strength and momentum in our business, and the world-class Chinese leadership team give me great confidence in our ability to capture the enormous growth opportunities ahead in this dynamic market,” said Kevin Johnson, Starbucks president and CEO. “No Western company or brand is better positioned to evolve with the rapidly expanding Chinese middle class – and we continue to mindfully evolve a coffee culture in China where the reward will be healthy, long-term, profitable growth for decades to come. We are committed to long-term investment in China.”
Over the next five years, the Starbucks Ready-to-Drink (RTD) business in China is expected to expand to more than 400 major Chinese cities across more than 125,000 premium points of distribution in partnership with Chinese food and beverage maker Tingyi.
On June 12 this year, the company will introduce the Starbucks chilled cup platform with four flavours, introducing a new Starbucks category to the Chinese consumer. This beverage platform is expected to quickly become a preferred on-the-go format for coffee and tea in China, according to the company.
“Starbucks is committed to playing the long game in China and is proud to be an integral part of the local community for nearly 20 years. Our company has a strong, healthy, responsible business with purpose-driven values that celebrates our incredible 47 years of coffee expertise in sourcing, roasting, blending and handcrafting some of the world’s finest coffees,” said Belinda Wong, CEO, Starbucks China. “The strong trusted relationships between our partners and customers give me great confidence in our ability to deliver our long-term growth while continuing to make investments in China, for China.”
Today, Starbucks operates around 3,300 stores in 141 cities in China with 45,000 employees.