Starbucks brand coffee plans to expand into China's second-tier market

Starbucks is working to expand China's second-tier market, while trying to integrate the ownership of its stores to replace the original partnership model.

Howard Schultz, chairman of the coffee chain, said that in the Chinese market, the company’s future success will depend largely on the steady increase in new stores in mid-sized cities, as Beijing and Shanghai already have many cafes.

Schulz’s ambitions toward China show that many cities in China that are not famous are rapidly forming considerable spending power and Western-style catering habits. Schulz sees China as the most important market outside of North America.

However, Schulz did not disclose yesterday that the company hopes to open many chain stores in China, nor did it elaborate on the Chinese market's contribution to the company's global sales.

"Whether from the current or long-term considerations, China has become the company's strategic focus." He said, "The opportunities we have in China are unparalleled."

The American company has 165 coffee shops in 18 cities in mainland China, of which about 120 are located in Beijing or Shanghai. In Greater China, including Hong Kong and Taiwan, there are fewer than 400 Starbucks stores.

Compared with about 600 cafes in Japan, this figure is still relatively small. The company has been working hard to add new stores in the Chinese mainland and Northeast China. Schulz described this process as the "embryonic stage."

Starbucks now has more than a dozen coffee shops in Dalian, Qingdao, Shenyang in the northeast and Chengdu and Chongqing in the southwest, many of which are newly opened.

Schultz said that, like some other fast food chains in the United States, the company is seeking new ways to make its drinks and West Point more in line with local tastes. It also seeks to acquire shares from Chinese partners.

In the late 1990s, Starbucks entered the Chinese market in cooperation with food and beverage companies in mainland China and Taiwan. Private equity group H&Q Asia Pacific H&Q Asia Pacific was an early investor in Starbucks' China business.