Am­bi­tious ex­pan­sion

CEO be­lieves the com­pany’s busi­ness in China will some­day ex­ceed that in US

China Daily (USA) - - 1 - By XUJUNQIAN in Shang­hai on­tact the writer at xujunqian@chi­nadaily.com.cn@chi­nadaily.

Star­bucks’ CEO plans to open one new shop ev­ery day in China for the next five years.

Star­bucks CEO Howard Schultz has made no bones about his am­bi­tion in China — to have one new Star­bucks ev­ery day in China for the next five years.

What Schultz is also can­did about, as a busi­ness­man, is how his am­bi­tion is go­ing to be re­al­ized— through em­ploy­ees, or in the lan­guage of Star­bucks, “part­ners”.

“Star­bucks, un­like most tra­di­tional con­sumer brands, has not built the com­pany by tra­di­tional ad­ver­tis­ing. The brand has been de­fined by ex­pe­ri­ence, and that ex­pe­ri­ence is de­fined by our peo­ple — part­ners wear­ing green aprons,” Schultz told China Daily, dur­ing his latest trip to Shang­hai in late Oc­to­ber.

Star­bucks en­joys great suc­cess in China — more than 2,400 stores in over 110 cities through­out the past 17 years and sup­ported by over 34,000 em­ploy­ees. The cof­fee scene of China, the world’s po­ten­tially largest con­sumer mar­ket for the bev­er­age, has also been rad­i­cally changed.

Back in 1999 when the com­pany first en­tered the Chi­nese main­land mar­ket, there was barely any com­peti­tor and few con­sumers could tell the dif­fer­ence be­tween a latte and a mocha. Now, like many other in­dus­tries, China is not only a fast ris­ing con­sumer of the bev­er­age, but also in­creas­ingly catch­ing up with the trends and hap­pen­ings. Spe­cialty cof­fee is the most re­cent case.

“What we be­lieve, as a com­pany, is that China will one day prob­a­bly sur­pass the size and scale of our busi­ness in theUS,” said Schultz.

Con­sul­tancy firm Euromon­i­tor es­ti­mated that Star­bucks had a 73.3 per­cent mar­ket share in China in 2015, com­pared to McCafe’s (run by McDon­ald’s) 9.3 per­cent and Costa Cof­fee’s 9 per­cent.

“Any com­pany that sells cof­fee can be a com­peti­tor. Not with any ar­ro­gance, but we have al­ways tried to fo­cus on our­selves and things we can con­trol. And if we do that well, we will take care of the com­pe­ti­tion,” said Schultz.

When asked if he thinks the Chi­nese cof­fee mar­ket would be any dif­fer­ent if it were not Star­bucks which en­tered the coun­try back in 1999, he paused and said he doesn’t think any other com­pany would have been able to so­lid­ify the po­si­tion that Star­bucks has, “be­cause I think we have done it in the right way”.

Schultz said he be­lieves that the key growth driver for Star­bucks in China will still be tra­di­tional stores, de­spite the mar­ket’s keen in­ter­est in new premium re­tail spa­ces — the Star­bucks Re­serve and Star­bucks Roast­ery.

China will one day prob­a­bly sur­pass the size and scale of our busi­ness in the US.” Star­bucks CEO

Howard Schultz,

ZHENG SHUAI / FOR CHINA DAILY

Em­ploy­ees serve cus­tomers at a Star­bucks store in Fuzhou, Fu­jian prov­ince.

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