How is Starbucks implementing it’s digital strategy in China? What does it expect in the future?
China, a thrilling market for Starbucks
Starbucks is already well established in China, this country represents the second largest market for the coffee company. It has been operating a coffee farmer support centre in Yunnan province, since late 2012.
China is the fastest-growing market globally. With 1.4 billion inhabitants, it offers many opportunities to do business. As the middle class is emerging with a higher purchasing power, people are more able to buy luxury products, including Western branded goods which have become synonymous with quality.
This economy represents a real opportunity for the coffee giant. In the Asia-Pacific region and China, the revenues for the last quarter have more than doubled from the previous year. But Starbucks does not intend on stopping here.
Starbucks’ goal: Make China its Largest Market by 2019
The aim of Starbuck is to expand its retail presence throughout all of China’s developed regions to make China its largest market by 2019.
Howard Schultz, Starbucks’ chairman and CEO plans to open 1,400 new shops over the next three years. With this goal, the Seattle-based coffee giant is going to almost double it’s current count of 2,000 Starbucks outlets across 100 Chinese cities.
Actually the strategy of Starbucks is to obtain a monopolistic position. They usually buy all the coffee shops in central positions in each city they operate. In that way, they eliminate most of the competitors because they have the budget to do so. The Chinese are attracted by this convenience and Starbucks locations offer this.
Do Starbucks fit with Chinese habits?
Chinese people have embraced Starbucks as part of their daily lives, attracted by the American way of life. They want more and more to ‘westernize’ themselves and this is why Starbucks appeals to them.
Actually, the popularity of Starbucks is not necessarily due to the drinks as Chinese are more used to drinking tea rather than coffee. They come to Starbucks for the experience and premium image it presents.
People usually come to Starbucks for meetings, business, socializing or relaxing. With their well designed and comfortable store aesthetic and experience, Starbucks offers the best atmosphere for gatherings that appeal more and more to China’s younger, burgeoning middle class.
The Chinese are changing their habits, the coffee consumption in China has been growing at an average annual rate of 16 percent over the past 10 years according the International coffee organization. These figures are expected to continue to increase in the future.