Starbucks plans to double its difficulty: it is unclear whether consumers will buy it.

According to Starbucks' plan for the number of stores in five years' time, Starbucks will have to open at least 500 new stores each year for the next five years to meet its target. Starbucks has grown from more than 400 stores in 2011 to more than 2300 now. This period of "super-high-speed" expansion has led Starbucks to sink rapidly from first-tier cities to second -, third-and fourth-tier cities. Now, Starbucks' plan to double its stores shows Starbucks' determination to dig deep into the Chinese market, and it also indicates that China's coffee market has entered a period of rapid expansion.

It is worth noting that Starbucks is not the only coffee brand to expand its stores in the Chinese market. In addition to European and American coffee brands such as Costa and Pacific, Korean coffee brands such as zoo coffee and diffuse coffee quickly distribute the Chinese market by direct marketing or joining. Compared with third-and fourth-tier cities, these coffee brands pay more attention to the coffee market in first-and second-tier cities, and focus on places such as business circles, airports, railway stations and so on. But as the cost of opening and operating stores in first-tier cities continues to rise, the opening rate of most foreign coffee brands has also slowed.

At this time, KFC and McDonald's, which have entered the Chinese market for many years, have launched freshly ground coffee products with more competitive prices by virtue of the existing advantages in the number of stores. At the same time, local coffee brands are also on the rise, and continue to explore new models to save shop costs in order to attract the attention of capital and partners.

Some industry analysts told Beijing Business Daily that coffee has been in China for a long time, and market cultivation started early, creating a prerequisite for these coffee brands to enter the Chinese market. With the entry of many brands and the rise of young consumers who are highly receptive to Western food culture, such brands see the potential of China's coffee market and begin to accelerate store expansion. While Starbucks' rapid replication is driving the growth of the domestic coffee market, so are Starbucks' competitors.

Want to use the Chinese market to boost performance

Some analysts believe that Starbucks' rapid layout in China and Asia has played a positive role in boosting performance and investor confidence.

Starbucks reported earnings of 49 cents a share in the second quarter of 2016, but revenue of $5.024 billion was below expectations of $5.033 billion. Global same-store sales, closely watched by investors, rose 4 per cent, less than expected 5.7 per cent, but same-store sales in China rose 7 per cent, and net profits from the Asia-Pacific region, including China, rose 18 per cent year-on-year. Starbucks has more than 2300 stores in more than 100 cities in China, making China the second largest market after the Starbucks U. S. market. Earlier, Starbucks CEO Howard Schultz said in an interview with the media that Starbucks was making a big bet on the Chinese market and expected the size of its Chinese business to grow to surpass that of its US business.

The growth of new stores brought about by the rapid expansion has led to Starbucks' encouraging performance in the Chinese market, and in addition to the store layout, Starbucks has also launched catering products other than coffee in China to attract more Chinese consumers. In July, Starbucks launched the "fresh Food" project in some parts of China, launching 38 meals in 12 provinces, including Sichuan, Qinghai and Henan, increasing the proportion of food products in Starbucks stores. It is worth noting that although Beijing is not covered by the "fresh Food" project, a reporter from the Beijing Business Daily recently noticed at the Starbucks Beijing South Station store that previously there were almost only dessert counters such as chicken soba noodles salad and smoked chicken Vegetables Salad. Some people in the industry believe that Starbucks is increasing the proportion and variety of food in its stores in order to supplement the single scene of its business coffee in order to attract more customers. In addition, Starbucks has also said that it will introduce its tea brand Teavana to the Chinese market, which is also seen by some people in the industry as a localized move for Starbucks to dig deep into the Chinese market.

Mass and challenges grow synchronously

For Starbucks, there is still a gap between the brand influence of Starbucks and Starbucks in the coffee field, such as emerging local coffee brands and Western-style fast food brands, but some industry insiders believe that Starbucks' long-term business coffee positioning is increasingly difficult to meet the needs of most consumers for coffee consumption scenarios. In addition, increasing the proportion of food will also be no small challenge for Starbucks, which has been dominated by coffee and other drinks.

In terms of the number of stores, Starbucks currently has more than 2300 stores that make Starbucks the number one in the Chinese coffee market, but KFC and McDonald's have a wider range of stores in China and entered the Chinese market earlier. The experience of localization transformation is more abundant. Now the launch of projects such as freshly ground coffee and afternoon tea is an upgrade of existing stores at a much lower cost than new ones. In addition, Kenmai has more advantages in food production, distribution and localization, and the prices of the two products are more suitable for the consumption level of third-and fourth-tier cities than Starbucks. It is unclear whether the sinking of Starbucks in the Chinese market will make consumers buy it.