Starbucks Corporation, the popular American coffee company and coffeehouse chain, has revealed its plan to establish more stores around China. The company says about 10,000 jobs will be available in the next five years as it expects to establish over 1,400 retail shops.
Founded in Seattle, Washington (1971), Starbucks operates at 23,768 locations worldwide, as of November 2016.
It’s indeed a huge surprise that the U.S. coffee giant has grown in leaps and bounds over the years in China, a nation of tea drinkers.
Coffee culture is now flourishing among the populace. It is now considered a status symbol for the middle class notwithstanding the economic downturn. A cup of coffee goes for 30 yuan (a little more than $4 with the current exchange rate).
Local media reports confirm that Starbucks is constructing an outlet that’ll be regarded as the best and biggest around Asia.
The 30,000 sq ft premium coffee house in Shanghai, has been described as “the second Disneyland” in the making. The statement was made by Starbucks China CEO Belinda Wong .
Wong, who was born in Hong Kong, educated in Canada and is now based in Shanghai, said: “Starbucks might break into 10-15 new urban markets in China every year, while continuing its penetration in megacities where it has taken hold.”
Starbucks aims to double its store count in China to 5,000 by 2021.
As a short term goal, the US company says it has almost completed 500 stores this year as part of a broader plan to operate at least 3,400 coffee shops in China by 2019.
“That’s an ambitious 70% expansion from the 2,000 stores it has now in 100 Chinese cities,” the company said in a statement.
“As Starbucks’ second largest and fastest-growing market globally, China represents the most important and exciting opportunity ahead of us,” said CEO Howard Schultz.
“In China in the coming five years we are definitely adding 10,000 plus new jobs every year. We open 500 stores a year and our goal is by 2021…to have 5,000 stores,” said Belinda Wong [Starbucks China CEO].
The 44-year-old who was appointed last October, said: “This is the early chapter of our China growth right now. We have barely even scratched the surface.”
Wong was named among the top 25 on Fortune China’s annual list of the country’s most influential businesswomen since 2012.
With China as the second largest Starbucks market outside the U.S., reports confirm the American company is making huge returns on investment.
Outlets in mainland China are already the most profitable as the middle class now have an unquenchable thirst for the drink.
However, at the cost of $4.43 a cup, an average Chinese worker considers it a “liquid luxury”. This is a big difference when compared to American urbanites who see it as an “everyday ritual”.
Starbucks opened its first Chinese store in 1999, and needed only 5 years to become a second largest market.
Other China-based U.S. food and beverage companies like KFC and PizzaHut aren’t making as much progress as Starbucks due to their business strategies.
The company (Starbucks) has expanded its menu to include items that were previously considered as strictly “local”. It now serves moon cakes, dragon dumplings, as well as tea-flavored beverages such as spicy mocha and oolong.
“There is plenty of space to infill in first and second tier cities where we have already opened – Beijing, Guangzhou, Shenzhen, Shanghai,” said Wong.
“We want to make sure we open stores that are not cookie cutters.”
As China expects to get a new Starbucks store everyday for 5 years, Schultz told CNN in an interview last October: “I think if you look at the 45 year history of our company … one of the things that we’ve done really well is that we’ve always played the long game.
“We had to educate and teach many Chinese about what coffee was — the coffee ritual, what a latte was,” Schultz said. “So in the early years, we did not make money.”
Wong is responsible for the planned 2017 opening of the first international Starbucks Roastery and Reserve Tasting Room in Shanghai, which, at 30,000 sq ft, would be twice as large as the original Seattle outlet launched in 2014, CNBC reports.
The theater-style Starbucks roastery will be located on West Nanjing street which is considered as one of the most expensive shopping districts in Shanghai.
“Shanghai Roastery is going to be much better than the Seattle one,” said Wong, refusing to elaborate of her statements other than hinting that the showpiece would look like a “second Disneyland in Shanghai”.
“It’s going to attract not only people in Shanghai but attract a lot of tourists in China,” she added.