Starbucks plans to open more mainland stores

Seattle-based coffee company Starbucks Corp said Thursday that it expects to open more stores in the Chinese mainland and reach 1,500 stores by 2015 despite fierce competition.

With its first mainland shop having been opened in Beijing in 1999, Starbucks now operates more than 1,200 coffee shops in over 68 mainland cities, Howard Schultz, president and CEO of the company, said during a partnership signing ceremony in Beijing with China Soong Ching Ling Foundation.

The company did not reveal the specific locations of the new stores that will be opened, but a spokesperson with Starbucks told the Global Times Thursday that its main focus is on Beijing, Shanghai, Shenzhen, Guangzhou, and other provincial capital cities.

The first- and second-tier cities are more suitable for Starbucks which mainly targets high-end consumers, said Yan Qiang, an industry analyst and partner with Beijing-based Hejun Consulting.

Starbucks is not the only overseas coffeehouse chain operator that has geared up for fast expansion. Given the Westernization of many Chinese people's lifestyle, the country's coffee market is booming, and is absorbing lots of new challengers to Starbucks, Yan told the Global Times Thursday.

With 326 stores in China, Starbucks' major rival Costa Coffee, a leading UK coffee chain, plans to open 400 new stores by 2018, according to the 2013/14 annual report posted by its parent company Whitbread Plc in May.

Costa, which entered the country in 2007, reportedly plans to account for one-third of China's coffeehouse chain market in 2018.

Starbucks is also facing some competition from other chains including Hong Kong-based Pacific Coffee and US-based Coffee Bean & Tea Leaf, Yan noted.

Tiny Xin, a coffee lover in Beijing, does not have a favorite brand and thinks many coffee shops, including Starbucks, are similar to each other.

There are many options in the market, all offering a comfortable place for drinking coffee, chatting with friends and reading books and featuring no competitive edges in terms of prices and flavors, Xin told the Global Times Thursday.

"The location matters. I usually go to South Korea's Caffe Bene, as it has a store near my apartment."

Despite the fierce competition, Schultz expressed his confidence in the market, saying at the conference Thursday that he still sees massive potential opportunities in the mainland, which is expected to become Starbucks' largest market outside the US by the end of 2014.