Starbucks China aims for 6,000 stores by 2022

Global leading coffee house chain Starbucks Corp has continued to accelerate its store expansions in China to reach the goal of 6,000 stores by 2022, as it has already opened 5135 stores by its third fiscal quarter this year, with comparable store sales increasing 19 percent year-on-year.

In China, the company has gained strong momentum in terms of revenue growth, store traffic recovery and margin expansion. Its year-on-year revenue grew by 45 percent to $905.2 million. Its transactions have seen a 30 percent increase, though partially offset by a 9 percent decline in average purchase price, propelling growth in comparable store sales.

In the third quarter alone, the company opened 162 new stores. Belinda Wong, chairman and CEO of Starbucks China, said in a recent discussion with investors and analysts that revenue growth and ability to attract new consumers have been their priority to deliver top profitability and returns. Nearly 70 percent of the growth in total revenue hasbeen generated from their new stores, the chairman said.

In digital terms, Starbucks China has increased adoptions and created new experiences, making mobile ordering even more convenient and personalized.

Starbucks China on Wednesday launched a new collaboration with Tencent's WeChat to allow consumers to create their own Starbucks status on their WeChat application. The new digital function has integrated strengths from the traditional on-premise coffee experience with mobile communication platforms to encourage more interactions among young consumers.

"Mobile ordering sales propelled by innovations have gone up to 34 percent of company sales, higher than 23 percent in the prior year and more than double pre-COVID-19 levels," the company's fiscal report read.

Additionally, active members of the coffee house have reached 17 million, a 4 percent increase over the previous quarter and 71 percent over the previous year.

Wong said, "It is important to note year-on-year revenue grew by 45 percent as we fully regained our pre-COVID pace of store development, and our new stores continue to deliver best-in-class profitability and returns."

She said the short-term volatilities that they face today are only temporary, adding the recovery path will continue to be nonlinear.

Looking ahead, Wong is very positive about the prospects of the coffee chain.

"We have a huge runway for growth in China, and we are only in the early chapters of our China growth story," Wang said."Our rapidly growing national footprint, market-leading digital ecosystem,customer engagement, robust innovation pipeline and the strength of the Starbucks brand are all unmatched in the market."

Starbucks globally reports a net revenue increase of78 percent to a record $7.4 billion in the third quarter, with comparable store sales up 73 percent.