starbucks china

Starbucks to Open Thousands of New Stores in China

10,000 new jobs each year

Starbucks unveiled an ambitious plan to open 500 new locations in China every year for the next five years. The expansion is expected to create 10,000 new jobs each year through to 2019.

“As Starbucks’ second largest and fastest-growing global market, China represents the most important and exciting opportunity ahead of us,” said CEO Howard Schultz. “We have confidence in the future of the Chinese economy, despite all the rhetoric, noise and issues,” Schultz continued. “People are looking for reasons not to believe. I’m on the ground and I see firsthand. I am bullish.”

At a company get together in Chengdu on Tuesday, Schultz said he believes China may one day become the company’s top market.

To emphasize how important the Chinese market is to the company, Starbucks has adopted a number of policies and changes to make the coffee retailer more welcoming to Chinese employees and customers.

Speaking at the “Starbucks China Partner-Family Forum,” Schultz emphasized to employees and their families the benefits of working for the coffee giant. Stressing the importance of family and stability, Schultz revealed that Starbucks would invest millions of dollars, and give around 10,000 Chinese baristas and store supervisors a stipend to cover at least 50% of their housing costs. The stipend would be adjusted relative to cost of living, and would vary from city to city.

In a country that has an established tradition of drinking tea, coffee continues to grow in popularity. Euromonitor forecasts Chinese coffee consumption rising 18 percent annually to 2019, while US growth is expected to rise only 0.9 percent. Since 1999, Starbucks has opened 2,000 stores in over 100 Chinese cities.

Starbucks’ success is due in no small part to the menu changes it has made to cater to Chinese tastes, offering food items like red bean-green tea frappuccinos, sausage buns and mooncakes.

Despite its successes, the Seattle-based company has encountered problems in China in the past.

In 2007, Starbucks came under fire for opening a store in the Forbidden City, the former home of China’s imperial kings and queens. After a grassroots campaign led by disgraced CCTV anchor Rui Chenggang, Starbucks eventually closed its store after only a few months.

In 2013, a CCTV report accused Starbucks of fleecing Chinese customers by implementing higher profit margins in the county. The report alleged that a tall latte cost $4.40 in Beijing, while the same drink cost about a dollar less in Chicago.

Starbucks is not the only US coffee retailer with aggressive expansion plans for China. Last January, Dunkin’ Donuts announced it would open 1,400 new stores in China over a 20 year period, with the first one having opened in the last quarter of 2015.

Charles Liu

The Nanfang's Senior Editor