Starbucks China announces the return of the former CEO

Starbucks (Photo: Fan Jianlei)

Reporter | Li Yuru

Editor | Ya Han Xiang

On October 11, Starbucks China Wang Jingying will continue to serve as the company’s CEO .

Wang Jingying has served as the president of Starbucks China since 2011, and was promoted to the CEO of Starbucks China in 2016. In 2019, she became the newly established chairman of Starbucks China. On October 1, 2021, she stepped down as the CEO of Starbucks China, and Cai Delin, the then chief operating officer of Starbucks China, was promoted.

A year later, she’s back as CEO.

Wang Jingying

In the past year, affected by factors such as the epidemic, Starbucks’ performance in China was a little difficult. Starbucks’ third fiscal quarter report for fiscal year 2022 showed that China’s market revenue was US$540 million, down 40% year-on-year; in addition, Starbucks China same-store sales declined due to a 43% decline in passenger traffic and a 1% decline in average customer unit price 44%.

According to Wang Jingying’s disclosure at the time, in the second quarter of fiscal year 2022, the operations of about 2,000 Starbucks stores in nearly 50 cities in China were restricted due to epidemic prevention requirements; during the epidemic in Shanghai, about one-third of the stores were temporarily closed. Or only accept takeaway delivery orders.

But Starbucks’ confidence in the Chinese market has not wavered.

On September 14, 2022, Starbucks released its 2025 China strategic vision at its global investor conference. It plans to open 3,000 more stores in China over the next three years at an average rate of one new store every nine hours, bringing the number of stores to 9,000. While expanding the stores, Starbucks China will also add 35,000 employees, bringing the total number of employees to more than 95,000. In addition, it will double its net income and quadruple its current profit growth target.

The strategic layout also includes the expansion of omni-channel sales and the “special star delivery” delivery business. Affected by the epidemic, e-commerce and community group purchases have replaced offline stores with substantial profits. Driven by this trend, Starbucks plans to achieve a growth rate of more than double the current sales performance of the delivery business by 2025; the sales of e-commerce business are expected to reach a compound annual growth rate of 30%.

Starbucks (Photo: Fan Jianlei)

In fact, Wang Jingying is the best person to routinely implement this strategy.

Under her leadership, the Chinese market has become Starbucks’ most important overseas market. In terms of market size, during the time he was at the helm of the company, the number of Starbucks stores in China increased from more than 400 to the current 6,000 stores, and it entered 100 new cities, covering a total of 230 cities in China.

In addition, she also led Starbucks to achieve a breakthrough in online business in China. Three years after the launch of the digital business, the online business has contributed one third of Starbucks China’s revenue.

But now that the Chinese coffee market environment is becoming more and more complex, Starbucks will naturally not be easy here. In terms of store size, product innovation and marketing, rising stars are targeting Starbucks and challenging it.

In the face of such a market, Starbucks China needs a person who understands the Chinese market and the advantages of Starbucks to take the helm. In fact, there are not many such candidates. Wang Jingying’s re-election as CEO may be the most ideal situation.

In the face of competition, she still expressed optimism at the earlier investment meeting, believing that the entire coffee market in China is still in the early stage of development and has huge potential. According to iiMedia Research, China’s coffee industry is growing at a growth rate of 27.2%, and the market size is expected to reach 1 trillion yuan in 2025. Therefore, Starbucks still has a large market space to explore.

According to the self-media “Snack Generation” report, Cai Delin, the current CEO of Starbucks China, plans to start a one-year coffee holiday after serving the company for 10 years. According to reports, coffee vacation is a unique employee benefit of Starbucks, and all partners who have worked at Starbucks for 10 years can apply. In the last three months of this year, Cai Delin will serve as a consultant to the China management team, focusing on store development, marketing and product innovation.