Starbucks China plans massive expansion

Starbucks China is planning to open a further 1400 cafes by 2019, the company has revealed.

Currently, the US headquartered coffee giant has about 2000 locations in 100 Chinese cities – and it uses Alibaba’s Tmall to sell giftcards and coupons to Chinese customers, at the same time boosting its brandawareness and appeal.

Starbucks said its Tmall Global virtual store collected 300,000 registered fans in the past month and launched a “social gifting” feature that allows users to send those cards and coupons to friends and family through the Tmall platform. On top of its digital push, Starbucks said it was aiming to boost its overall store count to 3400 by 2019.

“As Starbucks’ second largest and fastest-growing market globally, China represents the most important and exciting opportunity ahead of us,” Schultz said.

The news followed a milestone meeting between Starbucks CEO Howard Schultz and Alibaba founder Jack Ma who said afterwards they sought to “redefine the roles and responsibilities of a for-profit public company, one that invests in its people, giving back to the local communities in meaningful ways, and creating unique developmental opportunities for the youths of today.”

Alibaba and Starbucks share a similar vision, according to the two businessmen: building a company that’s doing more than just generating profits.

During a speech in Chengdu at an annual Starbucks event celebrating the company’s Chinese employees, Ma emphasised the point by highlighting the important role that young people play at both companies. At Alibaba, the average employee age is 26, while at Starbucks it’s 26.

“Alibaba hopes to work together with Starbucks to create even more opportunities to develop Chinese youth because they are our future,” Ma said at the Starbucks China Partner-Family Forum, sharing the stage with famed Starbucks CEO Howard Schultz. “All of you at today’s event represent China’s future.”

The China Partner Family Forum celebrates Starbucks’ 30,000 Chinese employees, reinforcing the company’s commitment to what it calls “conscious capitalism.” The goal is to boost company productivity by enhancing the work experience for those employees.

Starbucks launched its Tmall Global, store in December. The platform allows foreign companies to sell into China without having a physical presence in the country. Already major brands such as Costco, Macy’s and Nike, Japan’s Uniqlo and Germany’s Metro Group operate stores on the platform. Some of these companies, including Nike and Metro Group, do have physical stores in China, but they are selling through Tmall Global because the continued growth of eCommerce gives them another way of reaching consumers.