Starbucks to expand in China's market

Starbucks Corp, the largest coffeehouse company in the world, targets to increase its global outlets threefold to 40,000 and intends to establish China as its largest overseas market.

With 246 coffee outlets in China, Starbucks has been extensively buying out other Chinese partners in order to gain a bigger market share within the growing industry. Last year, Starbucks purchased 90% of a licensee Chinese company, thereby increasing its chances of a venture with a Taiwanese company with one hundred outlets in mainland China.

In an economy where many foreign brands have raised product prices due to a record high inflation, Starbucks is determined to optimize its supply chains in China and not translate the higher costs to consumers.

Coffee consumption is gaining popularity in China, with a rise of about 25% yearly, whereas Starbucks global sales growth target is 18%.

In order to add new flavors to appeal to the growing crowd, Starbucks also has plans for the next couple of years, to source for coffee at China's southwestern province Yunnan. Sourcing from China will also be a strategic move since the import tariffs has increased from 20% to 60%.