Despite market’s concerns about the depreciation of the yuan, Starbucks will open 500 stores per year in China during the next five years.
Starbucks is already the fastest growing market in China and is planning to open 3,400 locations throughout the country by 2019.
According to the Company’s president of the Asia-Pacific region, John Culver, Starbucks has no intention to slow down their expansion in the region which they characterize as being full of opportunities.
Other companies are also exploring the opportunities offered by the Chinese market. SAP SE, world’s leader in business-management software is betting its money on the fast-growing corporate spending and consumption.
As China’s economy is struggling and the concern over the depreciation of yuan have hurt the market the government had to intervene. The People’s Bank of China has repeatedly intervened on Tuesday in overseas yuan market as it reached a record-low against the U.S. dollar unseen in the past five years.
However, Starbucks is not worried about the situation. According to Culver the company has business in 70 countries around the globe and foreign currencies always fluctuate. He said that Starbucks’s operations haven’t suffered as a consequence of yuan’s depreciation.
Other American chain restaurants present on the Chinese market, including McDonald’s, Pizza Hut and other Yum! Brands Inc. restaurants, face difficulties, Starbucks is the only one eager to speed up its expansion.
The new Starbucks stores opened in 2015 performed better than the average of the stores opened during the past seven years. However, old stores have also seen an increase compared to the previous year, which mean that all of them performed quite well.
According to Culver the fact that the old restaurants are gaining more and more clients is a sign that Starbucks becomes a part of the people’s daily rituals.
Other companies confident that China is a good investment are Fast Retailing Co. and Hannes & Mauritz AB which have both said that despite the country’s economic slowdown they are planning to increase their exposure on the Chinese market.
Bill McDermott, the CEO of SAP declared that he wouldn’t bet against China, right before his company reported sales over those estimated by economic analysts.
As more jobs are being created in the Asian country, the middle class is rising so the market is expected to have more and more customers which will only benefit companies like Starbucks.
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