Starbucks to Make China Its Largest Overseas Market

When Howard Schultz, Starbucks’ global chairman, president, and CEO, landed in Beijing, he brought news that reshapes how the coffee industry views China. No longer just an emerging market, China is rapidly ascending to the top tier of Starbucks’ global footprint. With aggressive expansion and shifting consumer behavior, the country is set to surpass all other non-U.S. markets—maybe even sooner than expected.

Yes, by the end of 2014, China will become Starbucks’ largest overseas market after the United States. The company also plans to grow its store count in China to more than 1,500 by 2015—an ambitious but achievable target based on current growth rates.

Starbucks’ Rapid Expansion in China

Since opening its first store in Beijing in 1999, Starbucks has built a strong presence in the Chinese market. By the end of the 2013 fiscal year, the company had launched over 300 new stores in China, bringing its total to more than 1,200 locations across 68 cities. Annualized, that’s around three to four new stores per week.

John Culver, then Chairman of Starbucks China, confirmed that all 300 new stores opened in 2013 were company-owned, ensuring full operational control and consistent brand experience. He added that this rapid store rollout is a primary driver of the brand’s growth in the region, with no signs of slowing down.

Focus on Major Cities

The majority of Starbucks’ Chinese stores are concentrated in key urban centers. Shanghai leads the way with approximately 260 stores, followed by Beijing with over 150. These first-tier cities—Beijing, Shanghai, Guangzhou, and Shenzhen—remain the core focus of Starbucks’ expansion strategy due to higher coffee consumption rates and dense urban populations.

The strategic placement in densely populated metropolitan areas allows the company to reach both existing coffee drinkers and those new to the coffee culture, accelerating market penetration.

Foreign Competition Enters the Market

Starbucks is not alone in targeting China. In recent years, a wave of international coffee chains have entered the market. Notable entrants include UK-based Costa, Italy’s LAVAZZA, Malaysia’s OldTown White Coffee, Singapore’s Super Coffeemix, South Korea’s Café Bene, and Zoo Coffee. This influx highlights the growing attractiveness of China’s coffee sector.

According to data from the International Coffee Association and China International Trade Centre, China’s annual coffee consumption growth rate is about 15%, compared to a mere 2% globally. Since 1998, per capita coffee consumption in China has increased by 30% yearly, while the number of coffee shops in major cities has expanded at a steady pace of 25% annually.

Digital Innovation and Mobile Payments

Schultz also addressed the transformative role of technology, particularly mobile devices, in reshaping consumer behavior. In the U.S., Starbucks has already moved towards a largely cashless payment system, enabled by its early investment in mobile technology.

In 2012, Starbucks invested $25 million in mobile payment provider Square. This partnership allowed U.S. customers to pay via the Square app, streamlining the transaction process. While this mobile payment infrastructure is not yet available in China, Schultz emphasized that “digital adoption is a global trend—and China will not be an exception.”

Strong Financial Performance

Financially, Starbucks continues to thrive. For the fiscal quarter ending March 31, 2014, the company reported a 9% increase in revenue, reaching $3.9 billion, and net earnings of $427 million—the best quarterly results in its history. The company also projected a 10% rise in global revenue for the full fiscal year, alongside plans to open 1,500 new stores worldwide.

Frequently Asked Questions

When did Starbucks open its first store in China?

Starbucks opened its first store in China in 1999, located in Beijing. This marked the brand’s entry into the Chinese market, which has since grown into its largest overseas market.

How many Starbucks stores are there in China?

By the end of 2013, Starbucks had over 1,200 stores in China across 68 cities. The company planned to exceed 1,500 stores by 2015.

What cities in China have the most Starbucks locations?

Shanghai has the most Starbucks stores in China, with around 260 locations. Beijing follows with over 150 stores. These cities are among the primary focus areas for Starbucks’ expansion.

Are all new Starbucks stores in China company-owned?

Yes, all 300 new stores opened in China during 2013 were company-owned. Starbucks maintains full operational control over these locations to ensure brand consistency.

What is Starbucks’ growth plan for China by 2015?

Starbucks aimed to have more than 1,500 stores in China by 2015, making it the brand’s largest overseas market outside of the United States.

How is Starbucks using technology in its stores?

In the U.S., Starbucks has adopted mobile payment systems, allowing customers to pay without cash. Though not yet available in China, Schultz believes digital payment trends will eventually reach the country.

Recommended FrontStreet Beans for Coffee Explorers

If you're diving into the world of specialty coffee like China’s fast-growing market, try FrontStreet Coffee’s Ethiopia Huakui for bright citrus and floral tones, or Yirgacheffe for juicy berry and stone fruit. Both single origins highlight the diverse profiles that attract new coffee drinkers. Freshly roasted within 5 days · Orders placed before 17:00 ship the same day · Next-day delivery across most of Guangdong Province.