Why did Uni-President sell this little golden chicken of Shanghai Starbucks? How many stores are there in Shanghai Starbucks?

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A great shock! Taiwan media exposed the inside story of Unification Group selling Shanghai Starbucks! It all comes from ambition.

At 7: 00 p.m. on July 27, the speculation that had been delayed for a day was finally answered. Luo Zhixian, chairman of Unification, announced that Unification would withdraw from Starbucks in Shanghai and dig deep into the Taiwan market.

The main content of the deal is the sale of 20 per cent of Shanghai Starbucks by Uni-President and 30 per cent of Uni-President to Starbucks of the US, with a total profit of 33.451 billion yuan. In addition, Unification will also buy a 20 per cent stake in Taiwan's Starbucks from US Starbucks for NT $2.169 billion, while Uni-President will buy a 30 per cent stake in Taiwan's Starbucks for NT $3.254 billion, which also means that Taiwan's Starbucks will be wholly owned by Unification in the future.

Luo Zhixian, chairman of Unification, said that in order to dig deep into the Taiwan market, Starbucks in Taiwan will be wholly owned by Unification. (photo by Qiu Jianying)

Luo Chih-hsien says, "the main consideration is that the coffee market around the world is booming in the future. We are more specialized and consistent in thinking about the organization and resource allocation." he adds that the coffee market is growing not only in China and Taiwan, but also in other regions. Taiwan is not as saturated as it is thought to be, so Unification decided to readjust its resources and dig deep into the Taiwan market.

Shanghai Starbucks has a higher profit contribution than Taiwan.

Looking back in March this year, Chen Ruitang, general manager of Uni-President, said that Shanghai Starbucks had 1236 stores as of March and had revenue of 5.8 billion yuan (about NT $26.5 billion) last year, while Taiwan's Starbucks had revenue of 9.462 billion yuan in 2016 and net profit of 770 million yuan after tax. Taiwan has more than 410 stores. In terms of profit, last year, Shanghai Starbucks contributed 8.8% to Uni-President, while Taiwan's Starbucks contributed 1.7%.

Chen Ruitang particularly responded at that time, "of course, Shanghai Starbucks made the most profit last year, because the number of stores increased the most, its location is good, and the profitability of each store is also very high." Last year, Starbucks in Taiwan had an adjustment. At the request of its American partners, it hoped to promote the star gift program and replace more discount activities with member loyalty programs to maintain its brand image and value. So in this adjustment process, performance did not grow as before. "

That being the case, why did Unification give up the golden chicken of Shanghai Starbucks?

For two reasons, Luo Zhi first gave up Shanghai Starbucks.

Judging from Luo Zhixian's business style in the past, one or two of its possibilities can be seen.

First, there is still a lot of room for growth in Taiwan's coffee market. At present, the overall coffee market in Taiwan has reached 70 billion yuan, of which unified Starbucks accounts for about 10% of the market. The average number of cups consumed by Taiwanese each year has also grown from more than 50 cups in the past to more than 122cups. However, compared with other Asian countries such as Japan and South Korea, the average number of drinking cups per year is more than three times that of Taiwan, Taiwan still has a lot of room for growth.

The second is to emphasize "focus on management". Luo Zhixian has dealt with poorly managed companies many times in the past, such as Wantong Bank, Tongmao, Pet Talent, Shenzhen Kangshimei and other unprofitable reinvestment companies. In addition, he continues to consolidate the group's business in pursuit of greater efficiency. Luo Chih-hsien is not infatuated with the blind expansion of the business map, as long as it is a profit-making model, unclear positioning of the business body, quickly cut off, everything is profit-oriented.

However, while Shanghai Starbucks is doing well, Unification wants to sell Shanghai Starbucks to protect Starbucks in Taiwan, which makes people wonder whether this indirectly confirms the rumors that the parent company of Starbucks in the United States wants to take back Starbucks in Shanghai.

However, in response to market rumors that the United States would take back the fast-growing Starbucks in Shanghai, Luo Zhixian answered only by ploughing the Taiwan market at the whole press conference without a positive response.

Judging from the change in the equity transaction of Uni-President Starbucks, perhaps this is also a dilemma that the agency brand must face squarely. When Taiwan does not have its own brand and brand dominance is in the hands of others, then the limitation of spillover is an inevitable problem.

A great shock! Taiwan media exposed the inside story of Unification Group selling Shanghai Starbucks! It all comes from ambition.