Acquired 60 stores in Beijing and Tianjin Starbucks plans to open 100 stores

Starbucks, which is struggling to expand its operations in China, revealed recently that it has acquired a Hong Kong company that operates more than 60 Starbucks stores in Beijing and Tianjin. Starbucks also plans to open at least 100 coffee shops in China each year to expand local business.

The Hong Kong company acquired by Starbucks was called High Grown Investment Group. Starbucks was purchased from its parent company H&Q Asia Pacific, and the amount of the acquisition was unknown. This is the second time that Starbucks has increased its stake in the Chinese business. Its Chinese business has always been established as a joint venture.

The company's High Grown sold 90% of the shares of Beijing Meida Starbucks Coffee Co., Ltd., which operates more than 60 stores in Starbucks in Beijing and Tianjin. According to Starbucks, from the time Starbucks sold its first cup of coffee in Beijing in 1999, Handin has been responsible for the brand development strategy of the Starbucks brand in northern China. The remaining 10% of U.S. Coffee’s shares are held by Beijing Sanyuan Co., Ltd. Starbucks said it has no intention to purchase this portion of shares.

Martin Coles, president of Starbucks Coffee International Co., Ltd., said: "This kind of business integration will enable our business in China to be fully developed in the next 20 to 30 years."

Currently, Starbucks has more than 10,000 branches in 37 countries. The company's plan is to open 20,000 branches overseas, and half of them will be in Asia. Coase said that he did not specify the number of additional stores in each country, but when he was asked, “Is there any intention to add 100 cafes in China each year?” he said that it was the minimum number Starbucks had a few years ago. China is listed as a key market.

As China began to relax its regulations on foreign retail sales in 2004, multinational companies have begun to acquire the remaining shares in their joint ventures in China. Prior to this, according to regulations, companies such as Starbucks could not own and operate their own stores in China. They could only conduct business in China through joint ventures.

But now, foreign retailers can wholly own their own stores anywhere in China. Last year, French retailer Carrefour SA took all of its shares in three joint venture malls in China. This is also true of Ikea International AS, a Swedish household goods retailer, and Parkson Retail Group, a Malaysian department store operator.

Starbucks will have a buying option for all its businesses in China in the near future. However, Coase said that the company has not yet planned to fully recover its Shanghai business shares from the Taiwanese partner company.

Since Starbucks first entered China in 1999, one of its drinks, “Ice Bliss,” is still a very mysterious word for most people. In recent years, Starbucks has been making large-scale investments, trying to establish its competitive advantage as the first entrant in the Chinese market. According to sources from Han Ding, Starbucks has opened 62 stores in Beijing and Tianjin and has 1,000 employees and 209 stores throughout China.