“The Starbucks business here is in its infancy in terms of development and growth,” John Culver, head of Starbucks in China and Asia Pacific, said in an interview today in the southern Chinese city of Yunnan. Starbucks currently has 12,000 employees in the country.
The Seattle-based coffee chain is boosting headcount as it pushes to more than double local stores to 1,500 by 2015. The Asian nation is set to be its largest market outside the U.S. in two years as it expands to counter slower economic growth in developed markets.
In its China expansion, the cappuccino and latte maker will face pressure from rising costs and wages. The country’s consumer price index rose 2 percent from a year earlier in November.
Business in China is “very healthy” and the coffee chain operator will continue to maintain its margins in the world’s most populous nation, Culver said.
The company will also focus on growing the number of wholly-owned stores in the China and Asia Pacific region and sees new stores being the growth driver next year, Culver said. They will account for two-thirds of the region’s sales growth, an increase from less than a third three to five years ago, he said.
China’s coffee shop market is forecast to surge 55 percent to 4.5 billion yuan ($720 million) in 2015 from 2.9 billion yuan last year, according to data from research company Euromonitor International. The company today opened a support center for local coffee farmers in Yunnan.
China and Asia Pacific revenues rose 23 percent in the fourth quarter to $198 million, Starbucks reported on Nov. 1. This compares with a 9 percent rise in the company’s sales from the Americas.
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