Mon, 02 Oct 2023

Starbucks expects China to be "even bigger market"

30 May 2023, 22:44 GMT+10

© Provided by Xinhua

SHANGHAI, May 30 (Xinhua) -- Starbucks' new global CEO Laxman Narasimhan on Tuesday highlighted China's huge market potential and suggested the company's goal of opening 9,000 stores on the Chinese mainland by 2025 remains unchanged.

China's per capita coffee consumption is increasing but still lags far behind Japan and the United States, thus leaving much room for business growth, Narasimhan said during his visit to Shanghai, home to more than 1,000 Starbucks stores, which is more than any other city in the world.

"Our ambitions in China are large. It's such a large consumer market," he said.

The U.S. coffee giant opened its first store on the Chinese mainland in 1999. As of April 2, it had operated over 6,200 stores across 244 cities on the Chinese mainland.

Despite the impact of COVID-19, the company last year revealed plans to increase its store count on the Chinese mainland to 9,000 by 2025.

"We're set up to grow for a long period of time here. The number 9,000 is only a milestone over the course of the next three years in what is going to become an even bigger market for us," the CEO said.

While meeting Narasimhan on Monday, Shanghai Mayor Gong Zheng said coffee has become an important part of the Shanghai lifestyle and a new international calling card of the city. He expressed his hope that Starbucks will continue to optimize its R&D and investment in Shanghai.

In its fiscal report issued earlier this month, Starbucks reported a recovery in its Chinese mainland business this year, fueled by a rebound in traffic as customers returned physically to the stores.

The company achieved net revenue growth of 3 percent on the Chinese mainland in the second quarter of the 2023 fiscal year, which runs from Jan. 2 to April 2. The net number of new stores opened by Starbucks China stood at 153 during the period, more than double the figure for the previous quarter.

A traditionally tea-sipping country, China has in recent decades emerged as a heavy drinker of coffee and other new beverages, thanks to fast-growing disposable incomes, rapid urbanization and the rising interest in exotic and novel drinks.

According to the e-commerce platform Meituan, China's coffee industry was estimated at 200 billion yuan (about 28 billion U.S. dollars) in 2022, and it is projected to reach 369 billion yuan in 2025.

More Japan News

Access More

Sign up for The Japan News

a daily newsletter full of things to discuss over drinks.and the great thing is that it's on the house!