Star­bucks opens largest-ever store in Shanghai

Roast­ery out­let is key el­e­ment of gi­ant com­pany’s ef­forts to at­tract China’s more-af­flu­ent cus­tomers

China Daily European Weekly - - Front Page - By WANG ZHUOQIONG wangzhuo­qiong@chi­

Star­bucks, the world’s largest cof­fee chain, opened its big­gest cafe in the world in Shanghai on Dec 13, with an eye on at­tract­ing more di­ver­si­fied and tech­nol­ogy-savvy cus­tomers.

The Star­bucks Re­serve Roast­ery is the com­pany’s largest cafe of its kind and comes three years af­ter the com­pany launched a Roast­ery in Seat­tle. It is plan­ning to open sim­i­lar out­lets in Mi­lan, New York and Tokyo soon. The Shanghai out­let is also part of the cof­fee chain’s long-term ex­pan­sion plans in China.

Kevin John­son, CEO of Star­bucks Cof­fee Co, says the Roast­ery will serve as an in­no­va­tion hub for de­vel­op­ing new kinds of bev­er­ages and store de­signs.

John­son, who be­came the CEO in April, says the com­pany plans to work with more Chi­nese tech­nol­ogy com­pa­nies to en­hance dig­i­tal ex­pe­ri­ences in as­pects like mo­bile pay­ment, mo­bile or­der­ing and sup­ply chain man­age­ment.

Howard Schultz, ex­ec­u­tive chair­man of Star­bucks, says the cof­fee mar­ket in China will achieve the same scale as that of the United States in nine years. He says that in ad­di­tion to ex­tend­ing its food of­fer­ings in stores in China, it has plans to have stand-alone Rocco Princi bak­ery stores in the coun­try.

Cur­rently, the com­pany is open­ing one out­let ev­ery 15 hours in China and has set a tar­get of reach­ing 20 new ci­ties each year.

China is the com­pany’s fastest­grow­ing mar­ket, with more than 3,000 stores in 136 ci­ties.

By 2021, it ex­pects to have 5,000 out­lets in China. China is also the big­gest rev­enue driver for the Seat­tle-based cof­fee chain, since its same-store sales in China in­creased by 8 per­cent in the third quar­ter this year, while other stores in the Asia-Pa­cific re­gion rose by only 3.2 per­cent.

Star­bucks al­ready has over 600 out­lets in Shanghai — the largest num­ber in any city where it has a pres­ence.

Ac­cord­ing to Kan­tar World­panel China, Star­bucks has a pen­e­tra­tion rate of 37 per­cent in Shanghai, where cof­fee out­lets in gen­eral had a pen­e­tra­tion rate of 48 per­cent by the end of Oc­to­ber.

The mar­ket has de­mand for more hand-brewed cof­fee out­lets, while the roast­ery in Shanghai is a good op­por­tu­nity for Star­bucks to up­grade its prod­ucts and brand­ing, says Ja­son Yu, gen­eral man­ager of Kan­tar World­panel China.

In other first- and sec­ond-tier ci­ties, the pen­e­tra­tion rate is 16.8 per­cent for gen­eral cof­fee shops and 9.9 per­cent for Star­bucks.


Cus­tomers se­lect drinks and food at the Star­bucks Re­serve Roast­ery in Shanghai. The store, which cov­ers 2,700 square meters, is its largest out­let in the world.

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