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BEIJING,September25(TiPost)–StarbuckshascompletedtheconstructionofChinaCoffeeInnovationParkinKunshan,Jiangsuprovinceandputitintooperation,markingthefirsttimefortheworld’slargestcoffeecompanytohavethescaledverticalintegration'frombean-to-cup'acrossonemarket.
TiPostApphaslearnedthatduringtheconstructionoftheinnovationpark,twoadditionalroundsofinvestmentweremade.Thetotalinvestmentamountedto1.5billionyuan(approximately220millionUSD),makingitthelargestinvestmentbyStarbucksinChinatocreateacoffeeproductionandlogisticsbase,anditwillalsobethecompany’smostenvironmentallyfriendlyandenergy-savingproductionbaseglobally.
Currently,Starbuckshasmorethan6,500storesinChinaacrossover250cities.BybuildingtheparkinKunshan,Starbucksisestablishingacompleteindustrychain,roastinghigh-qualityArabicacoffeebeansfrommorethan30countriesandregionsincludingChina,tomeetthegrowingcoffeedemandofitsChinesestores,andfurtherexpanditspresenceintheChinesemarket.
“Asoneofthelargestconsumermarketsintheworld,ChinapresentstremendousopportunitiesforStarbucks.TheCoffeeInnovationParkhighlightsStarbucksforesightinelevatingthesupplychainthroughdigitalizationandadvancingoursustainabilityagenda,enhancingouruniquecompetitiveadvantageasweaccelerateourglobalgrowth,”saidLaxmanNarasimhan,theCEOofStarbucksCoffeeCompany."Icouldn’tbeprouderoftheChinateam’svisionarythinking.AsStarbuckslargestandfastest-growinginternationalmarket,wewillcontinuetodeepenourinvestmentandreinforceourunwaveringlong-termcommitmenttotheChinamarket,"hesaid.
DuringthelaunchonTuesday,StarbucksChinaChairpersonandCEOBelindaWongsaid,"TheCoffeeInnovationParkholdsimportantsignificanceforStarbucksinChinaandglobally.ItnotonlyshowcasesStarbucksunrivalledcoffeeleadership,fulfillingourscaledverticalintegrationinChina‘frombean-to-cup’,butalsosetsanewbenchmarkforsustainabilityinChina’scoffeeindustry."
TheinnovationparkbuiltbyStarbucksChinacoversatotalareaofapproximately80,000squaremeters,withthreemaincomponents:acoffeeroastingfactory,anintegratedlogisticscenter,andacoffeeexperiencecenter.Thefunctionsincludecoffeebeanimport,roasting,packaging,storage,logistics,aswellascoffee-themedtoursandrelatedtraining.
Amongthem,theintegratedlogisticscenterintheinnovationparkisequippedwitha34-meter-highthree-dimensionalwarehousingsystem,whichautomatesthehandlingofover90%ofgoods,efficientlymanaginginventory,tracking,andoperations.ThespaceutilizationrateissixtimeshigherthanthatofStarbucks'traditionalwarehouses,makingitthecompany'smostadvancedlogisticsdistributionsystemintermsofautomation.
TiPostApplearnedthatthelaunchofthisinnovationparkisthefirsttimethatStarbuckshasfulfilleditsscaledverticalintegration'frombean-to-cup'acrossonemarketandcompletedthelocalizationoftheentirecoffeeindustrychain.Theconceptofsustainabilityisalsointegratedintoallaspectsofthedesign,construction,andoperationoftheInnovationPark.Forexample,theparkisequippedwithover26,000squaremetersofsolarpanels,providing20%oftheenergy,andisexpectedtoachieveamaximumof90%wasterecyclingeachyear.
Afterthebaseisofficiallyputintooperation,itwillroasthigh-qualityArabicacoffeebeansfromover30countriesandregions,includingChina,tosupplyover6,000StarbucksstandardstoresinChina.ThisalsomeansthatthecoffeebeansusedinChineseStarbucksstoreswillbe100%roastedinChina.
StarbucksenteredChinain1999.In2012,itestablishedtheCoffeeFarmerSupportCenterinYunnan,providinglocalfarmerswithagriculturalskillstrainingandresources.InOctober2014,StarbucksReservebrandenteredChina.InDecember2017,StarbucksReserveShanghaiRoasteryopened.
OnSeptember14,2022,Starbucksstatedinits2025ChinaMarketStrategicVisionthatitplannedtoopen3,000newstoresinChinaatanaveragerateofonestoreevery9hoursoverthenextthreeyears.
StarbuckscontinuestoinvestinChinaandremainsconfidentintheChinesemarket.Lastmonth,itannouncedtheestablishmentoftheStarbucksChinaInnovationandTechnologyCenter(SITC)inShenzhen,withaninitialinvestmentofapproximately1.5billionyuanoverthenextthreeyears.ThecenterwillserveasStarbucks'firstdedicateddigitaltechnologyinnovationcenterinChina,furtherdrivingthedigitizationprocessofitsstoresandmultiplechannels.ThecenterwillbelocatedinFutianDistrictandisexpectedtostartoperationsinSeptemberthisyear.
WhenitcomestotheChinesemarket,NarasimhansaidthatdatashowsthattheaverageannualcoffeeconsumptionpercapitainChinaisabout12cups,comparedto200cupsinJapanand380cupsintheUnitedStates.Incomparison,thecoffeemarketinChinaisstillinitsearlystages.AlthoughStarbucksalreadyhasapresencein250citiesinChina,thereisstillroomforfurtherexpansion.Narasimhansaid,"TheestablishmentofaverticalindustrychainwillprovidetheengineandfuelforStarbucks'furthergrowthinChina."
Starbucksisalsoexpandingitspresenceinthird-andfourth-tiersmallcities.RegardingstoregrowthintheChinesemarket,WongsaidthatStarbuckshasalwaysadoptedabalancedstrategy,focusingonbothfirst-andsecond-tiercities.
"Typically,60%ofournewstoreopeningsinayearareinfirst-andsecond-tiercities,whichareourtop20cities,while40%areinlower-tiercities.Currently,Starbuckshasstoresin250citiesnationwideandhasentered800county-levelmarketsinChina.Itisworthnotingthatstoresincounty-levelmarketsusuallyperformbetterthannewstoresinthetop20cities,"shesaid.
Starbuckshaspubliclyexpresseditsoptimismaboutcounty-levelmarketsmorethanonce.Lastyear,StarbucksChina'sChiefOperatingOfficerLiuWenjuansaid,"Whenitcomestoexpandinginthecoffeemarket,Starbucksvaluesnotonlythemorethan300prefecture-levelmarketsbutalsonearly3,000county-levelmarkets."
Inaddition,localizingtheleadershipteamisamajorfocusforStarbucksChina.InOctoberlastyear,StarbucksChinaannouncedthatWong,wholedStarbucks'large-scaleexpansionintheChinesemarket,wouldonceagainserveasCEOofStarbucksChina.ShehasbeenwithStarbucksfor24years.Liu,whowasrecentlypromotedtoExecutiveVicePresidentandCo-CEOofStarbucksChina,joinedthecompany11yearsago.
Currently,StarbucksChinahas60,000partnersandhasselected20localcoffeeroastersfromamongthem.Afterreceivingover600hoursoftraining,theyformateamofcoffeeroasters,includingtheonlyfemalemasterroasterinStarbucksglobally.
WongstatedthatStarbucksChina'snextgoalistocultivateanewgenerationofleaders,includingtheStarbucksChinamanagementteam,storepartners,andregionalmanagement.
(ThisarticlewasfirstpublishedontheTiPostApp,Author|LiuDafang,Editor|FangYu)
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