Starbucks sets up its Chinese headquarters to speed up direct operations

Negotiations on equity acquisition with Beijing Meida have entered a critical moment

Starbucks is undergoing a comprehensive strategic adjustment in China. After experiencing the business model shared with its partners when initially entering the Chinese market, Starbucks is speeding up plans for full-scale direct operations in China. The reporter learned yesterday

On the one hand, the negotiations between the current Beijing U.S. investors and Starbucks headquarters on the acquisition of shares have entered the final critical moment; on the other hand, Starbucks China headquarters has been separated from the Hong Kong Asia Pacific headquarters and became an independent, directly reporting to the U.S. headquarters. mechanism. At the end of this year, the Starbucks China headquarters in Puxi, Shanghai will be officially operational. With the Starbucks China headquarters running on track, Starbucks is also accelerating its direct operations in China.

China headquarters is independent from Asia Pacific

It is understood that the establishment of the Starbucks China headquarters started preparations at the end of last year. Before that, Greater China, including mainland China, Taiwan, and Hong Kong, were all affiliated with Starbucks Asia Pacific. At the end of last year, Starbucks decided to set up its headquarters in China, separate it from its headquarters in Asia Pacific, and become an independent branch with a headquarters in Asia Pacific. At present, the top management personnel of Starbucks China headquarters such as chief financial officer, operation director, public relations director, and administrative director have already entered Shanghai and the number of workers is about 50. By the end of this year, Starbucks will increase its headquarters in China to 80 people, and its corporate structure will be even better. The address will also be relocated to Hongqiao, Puxi, Shanghai.

Yesterday, Weng Yideng, vice president of Starbucks Business Management China Ltd. (Greater China), said in an interview that the establishment of Starbucks China headquarters in Shanghai was due to the fact that with the rapid development of Starbucks in the Chinese market, the business is growing. Work more closely with partners. At the same time, Starbucks will open more and more directly-operated stores in China and have management rights in more stores. This also requires a Chinese headquarters to coordinate all aspects of the relationship. Weng Yi Deng stressed that the main function of Starbucks China headquarters is to maintain Starbucks brand image, to control the quality of Starbucks food, and timely release of company information.

Never develop franchise stores

The development of Starbucks in China in recent years has attracted attention. The company has said that it will develop China into the company’s second largest market in the world. At present, Starbucks’s largest market is the United States. In the United States, Starbucks has 8,000 direct sales stores.

The development of Starbucks in China has gone through the first phase from 1999 to 2005. At this stage, Starbucks entered China with a curve of cooperation with agents. Therefore, currently in Shanghai, Beijing, and Guangdong, Starbucks' business partners are Unigroup, Beijing Meida, and Hong Kong Maxim. Yesterday, Weng Yideng, vice president of Starbucks Business Management China Ltd. (Greater China) made it clear that Starbucks China has entered the second phase of development. In the second phase, they will develop more direct-operated stores, hoping to have more Starbucks. The shop has management rights.

Starbucks’ strategy of directly operating China has actually had substantial actions. Previously, Starbucks headquarters increased its stake in Shanghai Starbucks to 50%; last year, it also increased its stake in Maxim's Starbucks from 5% to 51%. According to reports, Starbucks has just acquired the management rights of the Starbucks store in Guangdong Province.

Now Beijing Meida, which already owns 60 stores in Beijing and Tianjin, is the final target to be conquered by Starbucks headquarters. According to reports, Starbucks currently does not have any equity in Beijing Meida, and the current two shareholders of Beijing Meidai are respectively Hanting Asia Pacific Venture Capital and Beijing Sanyuan Group. According to informed sources, at present, negotiations between the Starbucks headquarters and the investors of Beijing Meida have entered the most critical period. Yesterday, Weng Yi Deng also hinted that in addition to Shanghai, Guangdong, the equity has changed, becoming Starbucks Holdings, equity in other places will slowly change.

On the one hand, Starbucks strives to regain control of the company from its partners in mainland China, and on the other hand, it is also stepping up its expansion of its direct-operated stores. From the middle of last year, Starbucks has developed its own direct-operated stores in Qingdao, Dalian, Shenyang, Chengdu and Chongqing. So far, the number of Starbucks direct sales stores has increased to more than 30. Weng Yideng also made it clear yesterday that absolutely no franchise will be developed.

It is reported that so far, Starbucks has more than 430 stores in Greater China, of which there are more than 180 in mainland China, more than 60 in Hong Kong, and more than 60 in Taiwan, while Guangdong has 21 stores.