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Starbucks goes instant to woo Chinese consumers
The U.S beverage giant will serve -- gasp -- instant coffee as it expands into smaller Chinese cities
Headlining Starbuck's expansion into China: instant coffee.
The company plans to triple the number of its stores in China by 2015 to 1,500, and part of that scheme is to offer instant coffee packets.
Since a Starbucks hovers on just about every corner of Shanghai, the company is looking to expand in China’s second- and third-tier cities.
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"We will open 1,500 stores in China by 2015. Kunming in Yunnan Province and Hefei in Anhui Province are among the cities where we have decided to open this year," Wang Jinlong, Starbucks China president, told China Daily.
Although lacking a major store presence in Yunnan, Starbucks set up a coffee farm and processing facilities there in November 2010.
The instant coffee, Starbucks "VIA," which is already available in stores in a number of other countries, will be offered in mainland China, Hong Kong and Taiwan starting April 6, said Starbucks president John Culver.
"We see a big opportunity in packaged goods in China," Culver said, according to WantChinaTimes. The price is set at RMB 25 for a pack of three and RMB 88 for a pack of 12.
The second- and third-tier markets have very high potential and the company will provide high-quality coffee there, Culver said.
"It represents an exciting opportunity for us to expand our reach to instant coffee drinkers, China's largest coffee market segment," said Wang in support of the move.
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According to Euromonitor International, sales of instant coffee in China jumped 13 percent to RMB 5.1 billion in 2010, with Nestlé grabbing a 70 percent market share.
Rather than neglect China’s first-tier cities, Starbucks is setting up a research and development center in Shanghai and will focus on creating new tea products to be sold in China.
Starbucks China expanded its very limited tea menu in the second quarter of 2010, launching nine new tea drinks including three original-leaf Chinese-style tea drinks, four original-leaf foreign tea drinks, and two handmade special tea drinks.
