Starbucks is well-positioned for long-term growth in China, CEO says -Bloomberg

What happened: In response to competition from China rival Luckin, Starbucks CEO Kevin Johnson said in a recent interview with Bloomberg that the company is well-positioned for long-term growth in China, the second-largest and the fastest-growing market for the coffee chain. Over the company’s 48-year history, Starbucks has always had lots of competitors and China is no exception, Johnson said. “We really understand what makes a differentiated experience” especially after 20 years of operation in the country, he added. The combination of premium spaces, quality coffee, personalized service, and extensive digital reach through a partnership with Alibaba are the differentiators for Starbucks in China, Jones explained.

Why it’s important: By giving out generous discounts and building expansive store networks across the country, Chinese coffee chain up-and-comer Luckin is aggressively challenging Starbucks in China, a country of increasing strategic importance. However, Luckin’s capital-scorching growth has also drawn concern about its sustainability, given the company’s huge losses. China is increasingly a coffee-drinking nation. The country’s total coffee consumption grew at an average annual rate of 16% in the last decade, significantly outpacing the world average of 2%, according to figures from the International Coffee Organization.

Emma Lee is Shanghai-based tech writer, covering startups and tech happenings in China and Asia in general. We are looking for stories related to tech and China. Reach her at More by Emma Lee

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