What will be the impact of Starbucks' full direct operation in the mainland market on the domestic coffee industry?

As for Starbucks' direct operation in the domestic market, the forward-looking Industrial Research Institute believes that the overall impact on the domestic coffee shop industry should be limited, the main reasons include:

First of all, from the perspective of the competition pattern, Starbucks currently accounts for a small proportion of the domestic market and has not formed an absolute brand hegemony, even if the number of its stores increases significantly in the future (reaching 5000 in 2021). The overall competition in the market is expected to be relatively scattered, and the impact on the competition pattern of the domestic coffee shop industry is limited.

Secondly, from the price point of view, as the current domestic coffee consumption is mainly in first-and second-tier cities, the price has been maintained at a relatively stable level, but in the long run, China's third-tier and lower cities are markets with greater potential for coffee consumption in the future. The forward-looking Industrial Research Institute believes that with the sinking of consumer demand, coffee prices are more likely to fall, and for Starbucks, whether to maintain existing prices or lower prices to open up a broader market will actually have a very limited impact on the overall coffee consumption market in the future.

Finally, from the consumer level, the direct operation is mainly a change in the ownership structure, and does not have much impact on Starbucks store operation, so the impact on consumers is also very limited.

Starbucks is optimistic about the potential of mainland coffee consumption market.

From the perspective of brand competition in the domestic market, although Starbucks currently ranks first in brand competitiveness and quantity, the overall brand pattern of domestic coffee shops is relatively scattered, according to Starbucks' current 2800 stores, the market share is only 3.3%.

Another manifestation of the huge consumption potential of the domestic coffee market is that the domestic per capita coffee consumption is still low, far lower than that of Europe and the United States, and even far lower than that of Japan and South Korea, which are also Asian countries. According to the current per capita consumption of coffee in China is less than 20 cups, the market size is 70 billion, and the average market growth rate is 15%, the coffee consumption will exceed 100 billion yuan by 2020.

The acquisition of Chinese mainland, on the one hand, is considered from the perspective of management rights, on the other hand, it also reflects the importance and optimism of Starbucks to the Starbucks market.

With the continuous improvement of the consumption capacity of Chinese residents, the consumption capacity of coffee is also increasing, and the number of coffee shops is also showing a geometric growth trend. According to the statistics of the forward-looking Industrial Research Institute, in 2007, there were less than 16000 coffee shops in China. In 2016, the number of coffee shops once exceeded 100000, but the industry continued to reshuffle throughout the year. By the end of 2016, the number of coffee shops was fixed at about 85000.

The consumption is strong in the region, and the cities with third tier and below have great potential.

Judging from the current distribution of coffee shops in China, Shanghai has the largest number of coffee shops, with more than 5000 by the end of 2016. The average number of coffee shops in four first-tier cities is more than 2500, accounting for 15.7% of the total. Compared with the number of coffee shops in first-and second-tier cities, the number of coffee shops in three or four wireless cities in China is much less, and there is still great market potential to be tapped.

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