The plan is to almost double the number of coffee shops from existing 3,300 to nearly 6,000 through the year 2022. It comes to opening around 600 new stores each year. This new target is nearly 20% higher than the earlier announced target of opening around 500 new stores per year, CNN Money reports.
Substituting for Tea in China
The development comes on the back of the company opening its largest ever store in the city of Shanghai in December. The 30,000-square-foot store in Shanghai is more than twice the size of its Roastery in Seattle, which opened three years ago.
In a nation where tea drinking is the tradition, China has emerged as a big and vital market for Starbucks. Though the company has struggled with quarterly earnings over the last year, China emerged as the bright spot with increasing sales. Along with that of the Asia-Pacific region, the revenue from China jumped more than 50% during the last quarter compared to the same period a year before. While in the North and South American markets, the company revenue increased only in single-digit range.
Banking on Changing Preference of Young Chinese
The young and mobile Chinese consumers are looking at Starbucks as an attractive brand proposition, and the company is all set to capitalize on the momentum. The opening of the largest store in the world in a highly visible, prime location with offices and housing in close proximity has attracted large footfalls. The company also partnered with Alibaba Group’s (BABA) Chinese e-commerce portal where customers can purchase Starbucks Reserve coffee and other products and also book coffee tasting experiences. Starbucks is pushing "a coffee culture in China where the reward will be healthy, long-term, profitable growth for decades to come," said CEO Kevin Johnson in a statement.
The company is also launching a new product line of pre-made cold tea and coffee to China sometimes next month. Between 2017 and 2022, Starbucks plans to triple its revenue and double its operating profit in China.
Earlier this month, Starbucks sold the rights to sell its packaged tea and coffee to the Swiss food giant Nestle for $7.15 billion, which has filled its coffers with a huge cash pile to swiftly use for such an expansion spree. (See also: Nestlé Paying $7.15B to Sell Starbucks Products Globally.)