Starbucks announced that it plans to double the number of its stores in China from more than 2,300 to 5,000 by 2021. According to CNN, Starbucks says that it will open more than one new store a day for the next five years.
To oversee this task (which Starbucks also hinted at in January), the company promoted Belinda Wong to Starbucks China CEO. According to the company’s official statement, Wong will also be in change of “digital and e-commerce opportunities across China,” as well as the opening of Starbucks’ first international Roastery and Reserve Tasting Room in Shanghai in 2017.
The 45-year-old Starbucks Coffee Company opened its first store in China 17 years ago. In an interview with CNN, Starbucks CEO Howard Schultz discussed the initial road bumps the company encountered in the tea-obsessed country. “We had to educate and teach many Chinese about what coffee was — the coffee ritual, what a latte was… So in the early years, we did not make money,” Schultz said.
Since then, excluding some meat scandals, Starbucks China’s business has been doing quite well. The South China Morning Post reports that “Starbucks’ second-quarter sales rose 18% in China, a faster pace than the company’s worldwide revenue increase of 9% over the same period.” Starbucks’s growth is even more impressive given that China’s economic growth was just 6.7% this quarter (again).
Compared to Starbucks, other Western brands have not fared so well in China. Disappointed with its poor profits and earnings for the third quarter this year, the CEO of Yum Brands, which owns KFC and Pizza Hut, has pointed blame at the South China Sea ruling. This rise and fall of Western food brands is also apparent in retail brands.
Hopefully customers will show as much loyalty to the company as one “Starbucks uncle” during the recent flooding in Hong Kong.