Wed, Nov 24, 2004 - Page 10 News List

President Starbucks to speed franchise expansion in China

OPPORTUNITY With China opening its retail market to meet WTO requirements, the firm plans to launch more Starbucks outlets there

By Jackie Lin  /  STAFF REPORTER

President Starbucks Coffee Corp (統一星巴克), the firm in charge of the Taiwan operations of Seattle-based Starbucks, will speed up its franchise development across the Taiwan Strait, as China is slated to open up its retail market next month in accordance with WTO regulations.

"We're optimistic about the business prospects there, because the opening up of its market can stimulate consumption," said John Hsu (徐光宇), president of the coffee operator, at a press conference yesterday to launch its Christmas products.

"We'll be more aggressive in launching outlets in China," he said, refusing to elaborate.

In a 50-50 joint venture with Starbucks, President Starbucks has set up 51 coffee shops in seven major cities in China's eastern provinces of Zhejiang and Jiangsu since May 2000.

In addition to the Taiwanese company, the US coffee giant has inked deals with two other partners to operate its business in northern China -- ?including Beijing and Tianjin -- and in the south -- such as in Hong Kong and Shenzhen.

Hsu said the next step is to move toward China's second-tier cities and open outlets at a faster pace.

In stark contrast to President Starbucks' smooth expansion across the Taiwan Strait, its sibling President Chain Store Corp (統一超商), owner of the nation's largest convenience store chain, 7-Eleven, has been frustrated in its efforts to obtain the rights from the firm's US headquarters to expand operations in China.

Meanwhile, smaller rival Taiwan FamilyMart Co (全家便利) has teamed up with Ting Hsin International Group (頂新集團) to open more than 30 stores in Shanghai since securing approval from the Beijing authorities in April this year.

Faced with the fast expansion of his company's rivals, Kao Ching-yuan (高清愿), head of Uni-President Group (統一集團), parent of President Chain Store, said Monday that he has instructed employees to come up with other strategies, rather than "naively waiting for authorization from the US," according to Chinese-language daily the Liberty Times.

Kao said if India's Modi Group can obtain the rights to run 7-Eleven stores in India, President Chain Store would not rule out the possibility of forming a strategic alliance with Modi to expand its territory to Southeast Asia.

Jason Lin (林蒼生), chief executive officer of Uni-President Group, which owns Taiwan's largest food manufacturer, Uni-President Enterprises Corp (統一企業), said the group will increase its investments in the populous Southeast Asia as the region holds considerable development potential.

Despite expansion setbacks in China, Kao expects the group to achieve revenues of NT$260 billion (US$8 billion) next year, up 4 percent from this year's estimated NT$250 billion.

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