Starbucks commits big time to China — and not just with more stores

Photo: Jack Ma and Howard Schultz, China Partner Family Forum

Starbucks Corp. isn’t letting the current economic slowdown in China get in the way of its expansion — or investments — in the world’s most populous country.



The coffee giant plans to open 500 new stores this year in China — with a goal of 3,400 stores by 2019 — and to subsidize housing for many of its workers.



Starbucks currently operates about 2,000 stores in China.



“As Starbucks second largest and fastest-growing market globally, China represents the most important and exciting opportunity ahead of us,” said founder and CEO Howard Schultz, who noted that over time, it was conceivable that China could become the chain’s largest market.



In addition to opening more stores, Starbucks, starting this month, will offer a monthly housing allowance subsidy to its full-time baristas and store supervisors in China. The benefit will, on average, cover 50% of employees’ monthly housing costs, and “help them overcome the initial financial challenges of starting their careers and often, living and working independently,” Starbucks stated.



With the housing allowance, Starbucks is putting its own unique spin on what has become common practice for some industrial companies in China, who build large dormitory structures for their employees, many of whom move from rural areas to the cities to work.



Starbucks will also offer one-year sabbaticals, called the “career coffee break,” to workers with 10 years of service. A similar benefit is offered to its U.S. staffers.



“The continued investments we are making, coupled with the culture of innovation we have established, are elevating Starbucks partner and customer experience beyond that of any other retailer in China,” Schultz said.



Starbucks revealed its new investments at a company-sponsored event (the Partner-Family Forum) in China that included a guest appearance by Alibaba founder and executive chairman Jack Ma. The chain opened an e- store on Alibaba’s Tmall site last month, China’s largest open business-to-consumer platform. The store, Starbucks first social gifting platform in China, has more than 300,000 registered fans and has already become the number one performing brand on Tmall’s “Food and Beverage” category.



“Alibaba hopes to work together with Starbucks to create even more opportunities to develop Chinese youth because they are our future,” Ma said. “The more seeds of love we sow in our Chinese youth today, the more love they will give to the world tomorrow.”