McDonald’s, Google, and Coca-Cola are all companies that you would expect to be taking advantage of all the opportunities China has to offer. However, these companies are all moving toward a less involved approach within China. Coca-Cola even shut down their Chinese bottling plant after investing millions in this country. Censorship, potential political problems, and a volatile economy are all reasons that most United States companies are going down the road away from China. However, world giant Starbucks is ready to stay in China and expand rapidly. Nearly one new Starbucks store is opened every day in China. The statistic from the company’s official statement shows that Starbucks is opening over 500 stores annually.
When you think of Starbucks, New York City seems like a place that would be packed with these stores. However, Shanghai has more than twice as many Starbucks stores in operation. Starbucks chairman Howard Shultz has stated that he believes China is “Going to be larger than the U.S.” Shultz believes that the opening of these Starbucks stores will have a bigger impact than Shanghai Disney had on the economy of Shanghai.
One of the biggest challenges for American companies in China is becoming part of the Chinese culture. However, Starbucks has done this marvelously. One of the biggest reasons why Starbucks is so heavily supported by Chinese in their 20s is due to the incredible wages that you can earn while working here. The Chinese youth believe in what this company stands for. Starbucks has even offered some of their employees’ housing allowances to help them get out of unfit housing situations.
Starbucks chairman Mr. Shultz has also done a magnificent job at winning over the trust of Chinese government officials. The win-win opportunity for Starbucks and the local economy has helped to usher in a new age of western food stops that include KFC, Pizza Hut, and Taco Bell. Shultz and other leaders at Starbucks have learned how to work with local Chinese government officials to procure the land they need, get the building permits approved quickly, and open stores at a previously unprecedented rate.
It hasn’t been a completely smooth road to success for Starbucks in China. Starbucks has had to abandon store in more sacred areas like the Forbidden City due to the fact that Chinese officials and other potential customers believed this was taking away from Chinese culture. As long as Starbucks continues on the pathway they have set for themselves, it seems as though they will have a very successful run in China.