Starbucks plans to expand in China

SHANGHAI: Starbucks, the world's largest coffeehouse company, said yesterday that the recent closure of its 661 underperforming cafes in the US and Australia would not affect the company's sustainable expansion in China.

The Seattle-based coffee giant has 660 chains in China, of which approximately 330 operate across 26 cities in China.

China is now the fourth largest market of Starbucks outside the US, following Canada, Japan, and the United Kingdom, said Li Jing, Starbucks' public manager in Greater China, adding that the company aimed to extend its expansion into more second and third-tier cities in China later this year.

In Shanghai, the company has set up seven more chains giving it a total of 102 cafes so far this year.

The company also made aggressive inroads into central China this February in Wuhan, followed by another two openings in the city within three months due to the unexpected popularity, Wang Jinlong, its Greater China president, said.

Beset by shrinking sales in the US, Starbucks sees the country as pivotal to its overseas progression. China is one of the most important markets and projected to be the largest market for Starbucks outside the North American market in the future, Wang noted.

The famous coffee chain has opened dozens of operations in China last year, and more stores will come in 2008, Li said.

Starbucks, which has raised prices by 3 to 5 yuan for beverages last year, said it had no plan to lift its coffee prices further this year in spite of heavier pressure from increasing operation costs.