Starbucks To Invade Asian Market
Seattle-based coffee chain, Starbucks, is preparing a strategy to expand its operations in China and throughout Asia.
In anticipation of more positive numbers for this quarter following the first gains posting in two years in the prior, the company’s Chief Executive Howard Schultz discussed his company’s plans to expand operations in China and Japan as well as the possibilities of opening up chains in India and Vietnam.
“We’ve built 700 stores in Greater China in 10 years. I think the next 10 years will be greater than that,” Schultz said.
Helping to fuel Starbuck’s desire to further its operations in Japan is the company’s new instant coffee, Via. Instant coffee is extremely popular in Japan accounts for about half of the country’s coffee market. The market for instant coffee in Japan had an estimated value of $2.3 billion Japan in 2009. In fact, Japan’s instant coffee market is three times the size of that of the U.S.
“Most soluble coffee, as you know, is in jars,” Schultz said in a news conference. “Unfortunately – not to say anything bad about any other company or competitor – but all of it low-quality coffee and it’s stale.”
Shultz has also stated that Starbucks will eventually approach the Japan market in a similar fashion as the U.S. market by putting the company’s products in various retail stores that are not associated with the company.
There is also speculation floating around that Schultz and his caffeine-induced company are in discussions with Jubilant Foodworks (JUBI.BO) in order to prepare for an entrance into the Indian market. The company has not yet confirmed or denied the rumors yet.
“At some point in the near future we will make the right announcement and the right partner in India,” Schultz said. “We are enthused about India. We are enthused about Vietnam.
The company’s instant coffee brand that will play a vital role in expanding Japanese operations also helped the company post its first quarterly gain in U.S. same-store sales in two years. The company will also release an iced version of the product to the U.S. and Canadian markets in late June.