Coffeehouse giant Starbucks
Contrary to the popular anti-recession strategy of big companies, food and beverage giant Starbucks is gearing up for a massive expansion of over 400 branches in the Asia-Pacific region.
The new stores will be opened in India, Thailand, Indonesia, the Philippines, Malaysia, and Laos. The coffee chain will expand outside the major cities to widen Starbucks' reach. Laos, which has only had Starbucks since last year, will get one new outlet.
Starbucks' International and Channel Development President Michael Cornway explains that Starbucks will capitalize on the economic resurgence across Asia-Pacific.
Cornway states, “We are seeing headwinds shifting to tailwinds across markets around the world, including the Asia-Pacific region, and continued recovery coming out of the pandemic."
“The Asia-Pacific region will continue to be a global key growth driver for Starbucks. We remain optimistic of its long-term growth and opportunities, underpinned by a growing middle class and rising coffee consumption," he adds.
Asia-Pacific is fast becoming Starbucks' most significant profit driver as revenue slows in China, which still holds the mantle. Starbucks' Q4 report showed a steep 29% drop in its profits from the mainland.
Howard Schultz, the interim Starbucks CEO, attributed it to the recent COVID resurgence in China. Fortunately for Starbucks, its Asia-Pacific market has steadily seen over 20% revenue growth.
Schultz remarks, "Our markets outside China performed even better than we thought."
Starbucks is also launching initiatives like having a store drive-thru to increase revenue further. One of its latest branches in South Korea came with a drive-thru to increase customer convenience. The new outlets led to Starbucks reaching its 5,000 stores milestone.
Additionally, Starbucks will be opening over a hundred stores in Asia-Pacific this year, with some having the option of event hosting. Customers can now book a private room in Starbucks for events like birthday parties or company celebrations in select locations.
