Starbucks CEO sees decades of growth from China expansion

A man walks past an advertisement board of Starbucks in Wuhan, Hubei province, in this October 29, 2013 file photo. REUTERS/Stringer

China is Starbucks Corp.’s biggest growth opportunity, and its expansion there could last decades without letting up.

That’s the view of Chief Executive Officer Kevin Johnson, who spoke with Bloomberg’s Emily Chang at the GeekWire Summit in the company’s hometown of Seattle. Though the U.S. will remain a key market, Starbucks’ crusade to spread lattes and macchiatos across the Asian nation is key to its future.

“China is our second-largest and fastest-growing market,” he said. “We can build new stores in China for decades and still have opportunity for growth there.”

Starbucks doubled down on the market in July when it announced plans to buy out the partners in its East China joint venture. The company agreed to acquire the remaining 50 percent of the business in a $1.3 billion transaction, giving it complete ownership of about 1,300 cafes in Shanghai and the Jiangsu and Zhejiang provinces.

The company is betting that China’s growing middle class and urbanization will boost demand for coffee in a tea-loving country. Slowing sales in the U.S. have only added pressure to go big overseas. Starbucks has set a target of operating 5,000 cafes in mainland China by 2021.

Johnson, who joined Starbucks after a career in the tech industry, also sees innovation as key to fueling sales. That includes reformulating drinks, trying new store designs and enhancing its mobile app.

“The tech industry and the coffee industry certainly have two different business models, but they have a lot in common,” he said. “We have to innovate to stay relevant.”

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Bloomberg

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.