Starbucks Is Serious About Doubling Its Footprint in China

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While Netflix Inc. (NASDAQ: NFLX) may have decided on a wait and see approach to doing business in China, another consumer favorite has reaffirmed its commitment to expanding its footprint there. Starbucks Corp. (NASDAQ: SBUX) has promoted Belinda Wong, president of Starbucks China, to chief executive officer and Leo Tsoi, Starbucks China’s vice president of Store Development and Design, to chief operating officer.

Starbucks has more than 2,300 stores in China today, up from a mere 400 in 2011, and Wong has been instrumental in that unprecedented growth. In her new role, she will oversee the efforts to double that number to 5,000 Starbucks stores in China by 2021. This comes at a time when competitors such as McDonald’s Corp. (NYSE: MCD) and Yum! Brands Inc. (NYSE: YUM) are reducing store counts there or spinning off their China business.

Wong said:

It is a privilege and honor to be appointed to lead Starbucks business in China during this important time. There continue to be tremendous opportunities for Starbucks in China and I look forward to further elevating the mission and values of our company through growth and innovation for our Chinese partners and customers.

Back in July, Starbucks announced that Cliff Burrows, the group president for the United States and Americas, would assume the role of group president of Siren Retail. He remains a member of Starbucks senior leadership team and reports to CEO Howard Schultz. Burrows has global responsibility for the Starbucks Reserve Roastery & Tasting Rooms, as well as the Teavana retail business.

Also at that time, John Culver, group president, China/Asia Pacific (CAP), Channel Development and Emerging Brands assumed the role of group president, Starbucks Global Retail. Wong now reports to Culver.

As for Schultz, the July release said:

As part of these leadership changes, Mr. Schultz will increase his focus on global strategy, global store development and store design innovation to position Starbucks for its next wave of global growth. He will also continue to work closely with his Senior Leadership Team to ensure continued disciplined growth and operational excellence around the world.

24/7 Wall St. recently recognized Starbucks as a member of the Customer Service Hall of Fame. We also named it as one of the companies likely to increase its dividend by the end of the year, though we wondered if the aggressive international expansion plans might temper that payout hike.