When it comes to planning for the future, Starbucks is focused on China.
The company is building a new store in the country every 15 hours, and views boosting growth there as one of its “three strategic priorities,” said Starbucks CEO and President Kevin Johnson at the Fortune Global Forum in Toronto on Tuesday (Oct. 16).
With more than 3,000 stores already in operation in the country, another 2,000 are slated to open by 2021. In fact, the company builds more new company-operated locations in China than in its home country.
“To us, we open 500-plus stores a year, but to us, it’s not about 500,” said Belinda Wong, CEO of Starbucks China. “It’s about opening a store 500 different times because you’re in a different neighborhood and we’ve got to build that relationship with our customer.”
China is Starbucks’ second largest — and fastest growing — market. Starbucks China serves more than five million customers per week, most of whom visit between 1:00 p.m. and 3:00 p.m., though the country is beginning to adopt the U.S. custom of morning coffee beverages as well.
More than 60 percent of Starbucks’ products in China are paid for digitally via the company’s mobile app, which became available in the country in 2016. Starbucks also has partnerships with Alibaba and Tencent.
The coffee giant continues to build the business in a way “we believe is respectful to Chinese culture” and resonates with the Chinese consumer as it introduces a “predominantly tea-drinking culture to premium espresso beverages,” Johnson explained.
He added that so far, the trade war hasn’t had an impact on business in China, but he did admit that “consumer confidence and the economic situation may have softened a little bit.” In June, the company blamed a slowdown in the country on third-party delivery services.
But Johnson noted that any setbacks in China wouldn’t hinder the company’s overall plans. “We are playing the long game,” he said.