New Starbucks CEO shakes up China arm’s top management

Bloomberg reported, citing a post on Starbucks’ WeChat channel, that the management shift aims to hand leadership to “a new generation of successors. ”

Liu was named China co-CEO last year and had been working alongside Belinda Wong, the company said.

Wong, who had been overseeing Starbucks’ business in China since 2011, will remain the chairwoman of that market, taking charge of innovation and China’s development strategy and boosting the brand’s social influence.

The move came as the U.S. coffee chain is struggling with declining sales and growing local competition in China, its second-biggest market globally with over 7,300 locations, according to the trade magazine Restaurant Business.

Revenues from Starbucks’ China stores dropped 11% year-on-year to US$734 million in the second quarter this year while comparable store sales declined by 14%, according to the South China Morning Post.

Chinese coffee chains, meanwhile, have been offering customers drinks at much lower prices to compete with the U.S. giant, which has been in China since 1999.

As CEO, Liu will have to stabilize the business while working toward the goal of opening about 1,700 more stores in that market.

Her appointment is the second shift in executive management at Starbucks since the new CEO took the helm just over two weeks ago.

The firm’s CEO for North America, Michael Conway, announced his retirement last week.

Instead of filling his position, the company plans to hire a global chief brand officer to lead areas such as product and marketing.