Starbucks sets its course for China

Starbucks CEO Howard Schultz has made public the company's intention for China in an address to more than 1300 employees and their families in Chengdu this week. The company used the event, which coincided with the opening of its 2000 Chinese store, to announce its plan to open another 1400 stores in the country in the next three years. “We are deeply humbled by the enthusiasm with which Chinese people have embraced Starbucks as part of their daily ritual over the past 17 years,” said Schultz. “The continued investments we are making, coupled with the culture of innovation we have established, are elevating Starbucks partner and customer experience beyond that of any other retailer in China.” Beginning this month, full-time employees in China's company-owned Starbucks stores will receive a monthly allowance to assist them with rent. Additionally, Starbucks China is introducing an initiative to allow long serving employees at company-operated stores the chance to take up to 12 months unpaid leave. The employees' benefits, which includes health insurance and equity in the company, will continue during the 12-months off. In the last two years Starbucks has opened 45 Reserve stores in China and introduced the pour-over slow bar to 150 stores. An R&D Centre in Shanghai is developing food and drink options which cater to local tastes, and since 2006 the company has invested more than US$8 million in local communities. As a result, China currently represents Starbucks second largest market, trailing only the United States in terms of store numbers. Schultz told the China Partner-Family Forum audience, an event the company said is to honour the special role families play in China, that this could change. “Over time, it’s conceivable that China could become our largest market,” said Schultz. Schultz spoke to the Chinese parents in the audience, before introducing the Founder of Alibaba Group Jack Ma. “When he and I get together we’re talking about common values and we’re talking about humanity,” said Schultz. “Together building the kind of companies our parents would be proud of.” Starbucks recently opened its first e-store on Alibaba's Tmall last month, which allows customers to digitally purchase and send Starbucks gifts. More than 300,000 people registered as fans in the first few weeks, elevating Starbucks to the number one performing Food and Beverage brand. Ma said Alibaba hopes to continue its work with Starbucks, and to help to develop China's youth. “All of you at today’s event represent China’s future,” said Ma. “The more seeds of love we sow in our Chinese youth today, the more love they will give to the world tomorrow.” 
Starbucks China President Belinda Wong also addressed the crowd, spoke about the companies digital future. “Digital is highly relevant to our customers in China and we are committed to building a locally-relevant Starbucks Fourth-place Experience,” said Wong. Starbucks has previously spoken about its goal to become the Third-place in peoples daily lives, outside of work and home. “We will learn from the experiences in our other markets and explore new strategic partnerships with leading platforms to enable the Starbucks China digital flywheel,” said Wong. “More awaits us as we implement new digital experience innovations to surprise, delight and exceed the expectations of our Chinese customers.”

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