Starbucks Accelerates Second Stage of China's Sole Proprietorship into Development

Separating the China market independently, Starbucks is looking for a more convenient way to manage its sole proprietorship. Weng Yi, vice president of Starbucks Business Management (China) Co., Ltd., revealed in Guangzhou at the end of the week that Starbucks’ China headquarters has been separated from Hong Kong’s Asia Pacific headquarters and became an independent, directly-affiliated US headquarters organization.

Weng Yideng said that the establishment of the Starbucks China headquarters has begun preparations at the end of last year. Previously, Starbucks Greater China (including Mainland China and Taiwan, Hong Kong) business was attributed to Starbucks Asia Pacific management. At the end of last year, Starbucks decided to establish a new headquarters in China, making it an independent branch and an affiliate with Asia Pacific headquarters. At present, more than 50 senior management personnel of Starbucks China headquarters, such as chief financial officer, operation director, public relations director, and administrative director, have already entered Shanghai. Currently, the logistics distribution center responsible for the branches in mainland China is located in Hong Kong, the Asia Pacific headquarters. However, the Chinese headquarters is considering setting up a logistics distribution center in Shanghai to handle the distribution of branches in mainland China.

The intention of Starbucks' establishment of a Chinese headquarters is more directly directed to direct operations. “Currently, Starbucks has entered the second stage of development in China.” Weng said that the main function of Starbucks' China headquarters is to maintain Starbucks brand image and control the quality of Starbucks food. And its more important task is to help Starbucks develop more direct-operated stores in the Chinese market and gradually complete Starbucks' full-scale direct operations in China.

Although Starbucks has so far more than 180 stores in mainland China, it is divided into three partners under Starbucks's initial entry into the Chinese market, Beijing-Tianjin-based partner Beijing Meida, and Shanghai for Unistar. The company, Guangdong, is a Starbucks company.

After allowing foreign-funded enterprises to set up wholly-owned stores in China, Starbucks began to open more than 30 exclusive Starbucks-owned stores in Qingdao, Dalian, Shenyang, Chengdu and Chongqing last year. In this regard, Weng Yi Deng made it clear that Starbucks will never develop another franchise store in the future. He also revealed that Starbucks will withdraw more management rights in its stores, which will require the newly established Starbucks China headquarters to coordinate all aspects of the relationship.