Starbucks has been ambitious about its expansion plans in China.
“I am quite convinced that, over time, China will be larger than the US and larger than any market we have in the world,” Schultz said.
According to a recent report by UBS analysts Dennis Geiger and Lauren Silberman, the coffee giant may well be right to bet big on China.
The bullish view is based on the huge market for coffee in China where coffee consumption has tripled in the last few years, which Starbucks hopes to exploit. “Our surveys highlight a nascent and growing coffee culture, with consumers indicating increased purchase intent across all channels and affinity for the Starbucks brand,” the report noted.
Given their estimates, the analysts concluded that Starbucks’ ambitious store expansion and other targets may well be achievable. “Targets to double stores to >5K units, and increase revenue and op income 3x in China over the next five years appear achievable,” they wrote.