Interview: Director of International Business of Costa Coffee Chain Brand

Q: since when do you pay attention to the Chinese market and what are the factors for investing in China?

A: I began to set my sights on the Chinese market three years ago. There are two reasons for investing in China. First of all, we have a plan to develop rapidly overseas in recent years. In the past 5 years, we have successfully opened stores in 22 overseas countries. Secondly, China's living standards are steadily improving, and people's spending power is also growing. I find that many Chinese people are now willing to consume high-quality goods. Costa provides high-quality European food and a comfortable consumer environment. I think our products are in line with the quality needed by Chinese consumers, so we are willing to come to the Chinese market to develop this brand.

Q: apart from the huge market, what are the other factors that attract investment?

A: any investment decision must be carefully calculated. The size of the Chinese market is one aspect; on the other hand, the market is also growing rapidly. With the growth of economy, China's per capita consumption capacity is increasing. Our survey in China shows that in the Chinese market, both young people and older people like to try new things. There are many opportunities for Chinese people to go abroad now, such as traveling, studying or working. These people who have experienced going abroad will bring back the foreign coffee culture when they return home. The whole society is becoming more and more open. In recent years, China has developed rapidly in the introduction of foreign big brands. Many big international brands have been introduced to China, and Chinese people like it very much.

Q: what do you think of the returns and risks of investing in the Chinese market?

A: when investing in the Chinese market, the return is accompanied by risk, which is the attraction of the Chinese market. In terms of earnings, China is a huge market with potential.

In terms of risk, China is a vast country, such a huge market, in terms of supply chain is a challenge for us. It is indeed difficult for products to be transported and flowed between regions, while ensuring quality. In addition, traditionally, Chinese people prefer to drink tea, which may create some resistance to our sales. It still takes a long time for more Chinese consumers to come into contact with coffee and like coffee, and we need to pay a certain cost to cultivate people's willingness to spend on Costa.

Q: how to avoid investment risk?

A: it is very important to find investment partners. A good business partner can avoid making unnecessary mistakes. Local partners have local business knowledge and know what kind of trade is in line with common sense, national conditions and legality.

Q: how to choose partners in cooperation with local enterprises?

A: there are the following main factors: whether you have a good reputation, whether you have very good experience in food retailing, and whether you have mature operational experience in markets in different regions.

Q: how do you view the prospect of investment in China?

A: there will certainly be risks. But if I didn't have a good prospect, I wouldn't be sitting here today. The purpose of any investment is to achieve returns, but I would like to stress that our investment in China is not the pursuit of short-term benefits, we hope to have long-term cooperation and development. This needs to find a good partner to avoid the risk of investment, we chose Beijing Hualian.

We currently have 1000 stores around the world, and it is planned to grow to 3000 in the next five years, with about 1700 overseas. China accounts for a large proportion of our investment plan. I don't see any factors that can lead to big problems right now. The only thing we need to introduce are coffee beans and coffee machines, and everything else we need can be found in the local market or business. We have a good expectation for this project and are optimistic about its prospects.

Q: is the way you enter Beijing the same as that of other countries?

A: the main way we take to open up overseas markets is joint ventures, both in Shanghai and Beijing, in Russia and Australia. On this point, China is no different from other places. As long as we think there is a business opportunity and it is a long-term target investment, we will enter the market.

Q: as a brand of European origin, what localization considerations will you make in the development of the Chinese market?

A: China is a country with a long cultural tradition. We have just entered this market and all we can do is to design our products more in line with the local market. After coming to China, I noticed that young people in China now attach great importance to dating places, and many young people prefer to go to coffee shops. So in the design of the store, we try to make it a kind of environment that people like to date, make people relax and feel warm and romantic as far as possible.