An exclusive interview with Wang Jinlong, Chairman of Starbucks China

Mr. Wang Jinlong, president of Starbucks China, a well-known global coffee brand, came to Shenzhen to attend the third Shenzhen Summit of China Entrepreneur Forum. After the meeting, the reporter conducted an exclusive interview with Wang Jinlong.

Wang Jinlong, as the global vice president and president of China of Starbucks, which was named the brightest star brand by BusinessWeek and Fortune magazine, revealed that Starbucks has more than 12000 stores around the world, and China has become their key development area. At present, there are 10 stores in Shenzhen, and they will launch new stores before the end of the year to meet the needs of Shenzhen consumers.

Service is the most important

For policy reasons, Starbucks initially opened stores in China as joint ventures. At the end of 2004, with the opening of the policy, Starbucks began to enter the Chinese market in the form of direct stores. However, throughout the operation of Starbucks in the global market, Starbucks has basically established different business structures according to different markets. For example, Starbucks has a 100% stake in stores in the UK and other places; while stores in Taiwan, Hong Kong and other regions basically cooperate with local enterprises, Starbucks has only a partial stake; in the Philippines, Singapore, Malaysia and other places, Starbucks has adopted a purely authorized operation.

With the strengthening of Starbucks in the Chinese market, does it mean that it will take back its previous stake in domestic joint ventures? Wang Jinlong believes that, "the business model is not important, the important thing is to be able to provide consumers with the same services, let consumers say good services." "you know, good seeds come from combinations of different genes," Wang said. "Starbucks' joint venture in the Chinese market is successful because local companies have a better understanding of local tastes and local culture, and such a combination of strength and strength can make the market work well quickly," he said. Starbucks' performance in the Chinese market also illustrates this point. "

Therefore, Wang Jinlong said: "for China's Starbucks, the proportion of shares is not important, the important thing is that the two sides can have a common concept, common understanding and common development prospects." The company's success, business success or investment success, the greatest success is first of all accepted by consumers, only consumers accept, the company can really have long-term development. "

An exclusive interview with Wang Jinlong, Chairman of Starbucks China

He stepped into the same river twice and made great contributions to Starbucks' opening up overseas markets. He is now in charge of Starbucks Greater China business, setting ambitious goals for Starbucks' development in China. How will Starbucks' brand change and positioning change affect Starbucks in China in 2011? An exclusive interview with Wang Jinlong, Chairman and CEO of Starbucks Greater China in this issue of "Financial Conference Room", please follow us!

Starbucks will open 1500 stores in China

Starbucks Coffee was founded in 1971 when it operated coffee beans at Pike Market in Seattle, USA. In 1987, current chairman Howard ∙ Schultz bought Starbucks and opened the first store to sell drip coffee and espresso drinks. In June 1992, Starbucks was listed on NASDAQ in New York as the first professional coffee company. At present, Starbucks has more than 13000 stores and 145000 employees in 39 countries.

In Asia, Starbucks entered Taiwan and Chinese mainland markets as early as 1998 and 1999, respectively. At the end of 2005, Starbucks established Starbucks Enterprise Management (China) Co., Ltd. in Shanghai to manage Starbucks' business in Greater China.

Reporter: what are Starbucks' plans for the layout of Chinese mainland this year? How many new stores are you going to open?

Wang Jinlong: Chinese mainland already has more than 450 stores. We opened our first store in China on November 11, 1999, with more than 800 stores in Greater China. Our goal is to operate at least 1500 stores in China on Chinese mainland by 2015. Every year, of course, we have a very detailed development plan. Well, in the 3-5-year plan, more will be to provide Starbucks experience and experience to more consumers in new cities. China is also the second home market of Starbucks. We have always been full of confidence in the Chinese market, and we believe it will be realized in 2015.

Reporter: geographically speaking, what is the trend of the layout of new stores?

Wang Jinlong: well, from the development in the past 10 years, most of our stores are in coastal cities, first-tier cities and some provincial capitals and intermediate cities. For example, we have nearly 80 stores in Beijing and more than 130 stores in Shanghai. I am afraid that the future development will be more to the central or western, with the whole stage of national development in all aspects, we will carry out more new cities. We now have 35 cities operating in Chinese mainland. We hope to enter more markets and provide Starbucks embodiment and its services to more consumers in the future.

Reporter: not yet in Sanya (Starbucks)?

Wang Jinlong: there is no one in Sanya at present, so I want to go to Sanya again after today.

Reporter: now Starbucks has such an ambitious store opening target, but costs have been rising over the years, including capital prices, asset prices, labor prices and so on. So how does Starbucks deal with these cost problems?

Wang Jinlong: I think from the development of Starbucks as a whole, you can see that, in fact, after our economic crisis, Starbucks' transformation (transformation) is very successful. In the past quarter, which is also in the history of Starbucks, no matter in terms of consumer satisfaction, service product quality, including its finacial performance (financial performance) and financial performance, the entire profit is also the best in history, the best in 40 years. China (market) can say that in all aspects of China's development trend, no matter in terms of brand, consumer recognition, or our financial and economic performance, it should also be one of the best in the world. I think we are always full of confidence in China (market), but on the other hand, we are full of confidence and development, that is, investment in China (market), we will increase and accelerate investment in China (market). This is also a very important part of our development, and it is also a very important condition for introducing more new technologies, new products, or new ideas into China. So we are fully prepared. In terms of capital, most of our stores are directly operated in Chinese mainland, basically in Starbucks, and we have a joint venture with Uni-President in East China. In terms of funds, we can rest assured to tell you that we are fully prepared for this investment and should not be a problem.

Reporter: are they all self-funded?

Wang Jinlong: yes, they all have their own funds.

Chinese coffee consumers may exceed 200 million

The name Starbucks comes from the American writer Melville's novel Moby Dick. In this book, there is a first mate who likes coffee very much. his name is Starbucks. Although Melville has a high position in the history of American and world literature, his readership is not wide, mainly among people with good education and high cultural taste. Therefore, from the naming of Starbucks brand, we can sense its target market positioning. That is, urban white-collar workers who advocate leisure and have knowledge.

Reporter: how do you evaluate the prospect of the chain coffee retail industry in China, whether to adhere to the petty bourgeoisie and relatively minority customer base, or to target a wider customer base?

Wang Jinlong: Starbucks in China has a long history of five thousand years. The country and culture of tea culture can create a new coffee culture. We have always said that we are not going to replace tea, nor are we going to compete with other service provider (service providers). Competition is also a good thing, the important thing is to provide consumers with a new choice, a new way of life. In fact, I have talked a lot about the development of Chinese coffee culture in the past. Chinese coffee culture grows faster and develops better than coffee itself. In fact, I can say that our coffee culture has shifted to coffee consumption faster and more gradually. As we all know, there are many kinds of predictions and opinions in our market. China's coffee industry chain, on the whole, is a very large industry chain. It is said that in its future, there is at least an industrial chain of 1 trillion yuan, so we have a big plan for development. Its object, I think in the future, whether in the future or now, there will be more and more people, this is everyone's choice in life, is a way, will serve more consumers. We also estimate that, and in various surveys, the possibility of Chinese coffee consumers may reach 200 million, or more than 200 million. As you know, the United States is the largest coffee consumer in the world, and its population is no more than 300 million.

Reporter: in 2011, the price of Starbucks coffee has been raised. So what pricing principles does Starbucks follow in China?

Wang Jinlong: we pay more attention to and focus on how to provide more value for consumers. The price reflects the whole service and product quality, including his feedback to the society and the community, which is just one of them. As far as the situation in China is concerned, we are sure to put one is the whole coffee situation. As you know, the price of coffee has skyrocketed in the last year or so, and other commodities have also risen sharply. We will consider all aspects according to the situation of the entire international market, plus many of China's economy and geographical environment. As a matter of fact, we have recently made an adjustment. Our so-called adjustment is not blindly rising. If we adjust down the prices of commodities that consumers like very much, there will be an adjustment for various factors, geographical and environmental factors, so it is not a blindly growth, because the most important thing is to focus on your consumers and see how consumers recognize the whole value.

Starbucks wants to make Chinese tea

In March 2011, Starbucks launched a new brand logo to "present" the company's 40th anniversary. The new design removes the word "STARBUCKS COFFEE" and the outer circle from the old logo, changes the background from black to green, and expands the mermaid logo. The main purpose of Starbucks' bid change is to tie in with the positioning transformation of "omni-directional consumer products company". Prior to this, Starbucks has launched a range of non-coffee products in the United States, including tea and ice cream, and the word "Starbucks Coffee" is obviously not appropriate. In terms of sales channels, Starbucks announced that it will no longer be limited to retail stores, but will be extended to other areas such as supermarkets.

Reporter: at the end of last year, President Howard Schultz proposed to transform into a global consumer products company with multi-channels and multi-development platforms. what will be the embodiment of this business in China this year?

Wang Jinlong: we are operating in 55 countries around the world, and the main business is still retail in our stores. In fact, our future development is also very great in other aspects, especially in the United States. For example, our RDD, which is a fast-moving consumer goods, also has a business of nearly 1 billion US dollars in the United States. This is also a new category that Starbucks founded itself and founded in the United States. Recently, we have also seen that our VIA free-brewed coffee is also on sale all over the world. On the one hand, after more than 20 years of research and development, it has indeed created a new category. We launched in October 2009, and are currently in the United States, Canada, Japan, the Philippines and the United Kingdom. We just launched in China on April 6th. In fact, VIA sales in these countries have reached more than 200 million US dollars in this short period of time, which is also very popular with consumers. In this way, you can see that Starbucks is a new culture and a representative of lifestyle. We will be able to make use of our retail foundation in other channels, and we will be able to have more development in other aspects. We will also have a lot of development in food service (food service) in the future, so diversified development is only one of them.

At the same time, we all know that Starbucks has created a third space. Now, from our whole situation and all aspects of the economy, especially the development of science and technology, we are also in digital. We have also made great progress in digital, technology, social media (social media) and e-commerce (e-commerce). This is also a very important aspect of building the fourth space fourth place. You may also know that Starbucks is No.1 brand (the largest brand) in facebook, and there are probably more than 30 million fans on facebook. In China, we have also carried out a lot of this on Kaixin.com and Weibo, from social media (social media) and digital (digital), to give us consumers a big communication, or interaction (communication). The essence of the so-called diversified development is to better enable Starbucks to have closer ties with our consumers and society in many aspects, including science and technology.

Reporter: you just said that Starbucks' sales channel is relatively strong. Starbucks uses this powerful channel to launch some products. So is it understandable that Starbucks will launch more products under this powerful channel?

Wang Jinlong: yes, in fact, the whole consumer, because coffee is a very, very basic, can be used as a very basic element (element) or raw material, it can add a lot of products, for example, we have, for example, we have starburk icecream (Starbucks ice cream), which has been made in the United States for many years, and we hope to introduce this product to China more quickly. In these other development directions, we have also done a lot of research and development, mainly coffee will also do a lot, for example, in the refreshment (refreshments), in the beverage (beverage) industry, no matter whether it is food or other derivative consumers of coffee, there will be great development. At the same time, we also hope to make a difference in tea. I want to be able to create Starbucks brand, maintain quality, be able to create many good international brands, products, including tea, can take it as a very important direction of our development. In fact, Starbucks tea business and tea related (related) business also has a business of nearly 1.1 billion US dollars, because Starbucks is mainly coffee, so let people know. Recently, what is very important for us this year is to build the second global R & D center in China in Shanghai. We hope to be able to develop in the future, because China's tea culture has a history of more than 5,000 years and has a very deep history. With very good products, we hope to be able to better promote Chinese tea and tea culture in China through the Starbucks brand in China. As I just introduced, our second R & D center will be built in China and Shanghai. I hope it will be very joint and become a center of tea culture and development, a global center.

China is Starbucks' second home market.

As the first Chinese at the top of Starbucks, Wang Jinlong joined Starbucks, then a small company, as legal director as early as 1992. Three years later, Wang Jinlong began to undertake the task of Starbucks' international expansion, opening up more than 20 overseas markets for the company in six years, and contributed to Starbucks' entry into Japan, Taiwan and Chinese mainland. In 2000, Wang Jinlong retired from Starbucks and returned home with his wife. In 2005, Wang Jinlong returned to Starbucks as senior vice president and chairman of Greater China.

Interviewer: how did you feel when you entered Starbucks twice?

Wang Jinlong: I think the very important part is to say, it used to be in the support center support center, the global support center, that is, the so-called headquarters. Indeed, a lot of innovation, new development and management are all for the construction of existing brands. The whole world should adhere to one principle and one standard, and many of them are pushed from there to others. Especially at the beginning of the development of several new markets, it is to go out. Now my feeling is, now to set up Starbucks, because I am in China, is in Greater China, how can enterprises like Starbucks become more international. Starbucks regards China as its second home market, and its R & D center and more development are also in China. Through this, Starbucks becomes more international and becomes a global company. At the same time, I can better understand how to adhere to Starbucks culture and Starbucks values in China, and how to make more Chinese. We are talking about local relevance (things related to China), more Chinese and Chinese culture, products, related, more suitable for our China, to be able to put it through this system, into the Starbucks system, the best thing is how to combine the best of the East and the West, it is the source of your innovation, is that you can really, not just to meet the needs of consumers More importantly, it is a very important way to guide consumer demand. So I think Starbucks will develop more and make it more international, and China will play a more and more important role at the same time.

Reporter: is there any difference in management decision-making? is there any change that you feel is quite different?

Wang Jinlong: in terms of China's development as a whole, China's first is the only one with a very small large economy. China has a large volume, a large area and a large population. Second, I think the whole speed of China is even faster. Third, I think in China, the whole intensity (intensity), that is, the energy and effort (effort) needed by all parties, the resources needed, all aspects are very, very.

Very demanding (demand). Fourth, I think there is a lot of competition in China, although very often, we can compete fiercely in two aspects, on the one hand, we are very competitive, on the other hand, the competition is also very primitive, very early, because it is still developing, and there is still a lot of room for it, just like the coffee industry. But its development is relatively fast, which adds up to something that no country has experienced in the process of economic development, including the development of the company, which we call game changer (rule changers). Many of your rules, methods and methods of doing business have to be changed in order to really adapt to this market and the development in all aspects. in this respect, not only for Starbucks, but also for many large international companies, I have also sat down with many international manufacturers, especially in China, to do a lot of communication. In fact, we all have a common feeling. In many cases, China has changed a lot, and he can also use this point of view to change, or apply it to other developing countries, including markets, including some of his practices at home. I also think that there will be more inventions in the future, and more new things will start from China, so that it is more of a two-way. Therefore, whether it is managing an enterprise in China or as an international company in China, it is more important to have a good understanding of Chinese and Western culture and the mentality of its consumers. You must respect the culture. You must be able to integrate and integrate into your operation and management in order to truly integrate, take root here, and have better and greater development.