Money Starbucks says aims to triple China revenue by 2022

23:02  16 may  2018
23:02  16 may  2018 Source:   reuters.com

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Starbucks is stepping up its expansion in China , aiming to have 6,000 stores in the country before the end of 2022 . It plans to triple its revenue and double its operating profit in China between 2017 and 2022 .

HONG KONG - Starbucks Corp., the world's largest coffee chain, said on Tuesday it aims to open 500 stores in China this year, shrugging off a slowdown in the world's second-largest economy that has hit global retailers.

A cup of Starbucks coffee sits on a table in a cafe in central Hong Kong© REUTERS/Joel Boh/File Photo A cup of Starbucks coffee sits on a table in a cafe in central Hong Kong Starbucks Corp (SBUX.O) is looking to more than triple its revenue and almost double its store count in China over the next five years, doubling down on the market as traffic growth comes under pressure in the United States.

The U.S. coffee chain, which recently raised $7.15 billion in a deal with Nestle SA (NESN.S), aims to have 6,000 stores in the country by the end of 2022, it said in a statement. It has around 3,300 stores in 141 cities in China currently.

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Starbucks Corp plans to triple the number of coffee outlets it runs in China over the next four years, the Associated Press reported. The world's biggest coffee chain would increase the number of coffee shops in China from 470 now to 1,500 by 2015, Asia-Pacific President Wang Jinlong said on Tuesday.

China and India together will account for half the global pay TV subscribers and expected revenue of USD 243 billion by 2022 . More than 1 billion OTT and Pay TV subscribers are forecast by 2022 . China will add 40 million subscribers, taking the national tally to 353 million.

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Starbucks dominates China's coffee scene, although it is seeing more competition from smaller rivals, similar to how it is coming under pressure from a "third wave" of boutique coffee sellers and cheaper rivals in the United States.

Late last year it launched its first overseas "Reserve Roastery" - an opulent flagship store with gourmet coffees and a bakery - in Shanghai, where executive chairman Howard Schultz told Reuters store numbers in China would hit 10,000 within a decade, overtaking even the U.S. market.

Starbucks also said it expects to more than double its operating income in China over the next 5 years, relative to 2017.

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Starbucks aims to boost revenue by 10% and add 12,000 new stores. Internationally, Starbucks plans to add more than 5,000 new stores in China by 2021, adding to the 2,500 the company already operates. Analysts at Deutsche Bank say they believe in Starbucks for the long term, but have

By 2022 , China will account for half of the revenues collected by OTT operators in the 22 Asia Pacific countries covered by the report. Revenues from SVOD services and that generated by advertising on OTT platforms are well matched.

It made $3.24 billion in China/Asia Pacific revenue in the past financial year while operating income was $764.8 million, according to calculations by Reuters. A breakdown for China alone was not immediately available.

This month Starbucks struck a deal with Nestle, the world's largest food and beverage company, to give the Swiss firm exclusive rights to sell Starbucks' packaged coffees and teas around the world.

Starbucks said the alliance with Nestle would help further extend the coffee chain's reach and scale throughout China.

"Starbucks will look to leverage the recently announced global coffee alliance with Nestle to provide even more at-home options to the Chinese consumer in the future," it added.

(Reporting by Adam Jourdan; Editing by Edwina Gibbs)

New Starbucks policy: No purchase needed to sit in cafes .
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