(Yicai Global) May 16 -- Starbucks Corp. will expand its China market over the next five years, the coffee store chain said during its first-ever China Investor Conference. The company's decision comes at a time when local and international rivals step up competition.
The Seattle-based coffee store chain plans to open 600 new stores per year, expanding to 100 new cities to cover 230 cities across the Chinese mainland by the end of financial year 2022. Starbucks also looks to more than triple its revenue and double its turnover in China over the next five years, according to a document the company sent to Yicai Global.
It will launch new Starbucks chilled cups next month as part of plans to expand ready-to-drink premium points of distribution to 125,000 in over 400 cities. Through Nestle Global Coffee Alliance, Starbucks will extend its reach and scale throughout China, it said.
Purpose-driven Starbucks China and the Starbucks Foundation reaffirmed USD20 million five-year commitment to social impact programs, revealed the document.
When Starbucks Reserve Roastery Shanghai opened in December, Howard Schultz, Founder and Chairman of Starbucks, told Yicai Global that Starbucks hopes to run a total of 10,000 stores over the next eight to nine years. As it already operates nearly 3,300 stores in 141 cities, that's to say that it will open some new store every 15 hours on average. According to data provided by Starbucks, it will have more than 6,000 stores by 2022 if it goes ahead with its plans as scheduled.
China is Starbucks' fastest-growing market and its second-largest market only behind the US, as per its financial report. However, coffee chain operator is facing stiffer competition in the Chinese market. It will face more challenges if it wants to dominate the market in the world's second-largest economy. The Chinese coffee market is worth about CNY100 billion (USD16 billion) and expands about 40 percent a year, according to Chinese news portal Foodaily.
Luckin Coffee Co., a Chinese coffee startup, yesterday accused Starbucks of creating a monopoly and said that it is preparing an antitrust suit against the US company. Costa Coffee, a British chain, also plans to open 1,200 stores in China by 2022. Luckin Coffee has opened 525 stores in less than half a year. Fast-food restaurant chains such as KFC and McDonald's and convenience stores like Family Mart also forayed into the coffee market, stepping up the competition.
Editor: Mevlut Katik