Friday, 20 July, 2018

Starbucks aims to triple China revenue by 2022

Starbucks plans to nearly double the amount of stores it has in China by 2022 opening a new one every 15 hours Starbucks aims to triple China revenue by 2022
Melinda Barton | 17 May, 2018, 12:31

The strategy was announced out of the coffee giant's first investor conference in China this week, where attendees heard that between 2017 and 2022, about 600 new stores will open a year across the mainland - a figure that will almost double the brand's presence across the country. The company (Seattle-based) is also expecting to double more than its operating profit in China by the end of the fiscal year of 2022.

"This is the flawless time for us to gain momentum that will boost the growth rate", Johnson said in Shanghai, the day before Starbucks assembled 60 shareholders, the foremost to be conducted outside the U.S.

Starbucks is the dominant figure in the coffee scene of China, although it has seen increased competition from much smaller rivals, the same way it has come under pressure from boutique coffee roasters and less expense rivals across the U.S. Starbucks did not release a break down for just China as a standalone region.

Yum China Holdings, which separated from Yum! Customers these days prefer shopping while sitting at home. In China, where cafe culture is less mature but e-commerce more developed, Starbucks cafes have cornered the market on plush but casual meeting spots.

The 8.1 billion yuan (S$ 1.7 billion) ready-to-drink coffee market in China is now dominated by Nestle with 71 per cent market share, according to data from Euromonitor International. That's something Starbucks hasn't done previously in the country.

"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 the company's CEO and president, Kevin Johnson. Starbucks said Wednesday that it is planning to leverage that partnership to bring more off-the-shelf packaged coffee to Chinese consumers.

The 8.1 billion yuan (S$1.7 billion) ready-to-drink coffee market in China is dominated by Nestle with 71 per cent market share, according to data from Euromonitor International.

Now, 60 per cent of transactions in its China stores are through mobile payment.