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Tag: starbucks

  • Paris designs for Starbucks Taiwan

    Paris designs for Starbucks Taiwan

    Starbucks Taiwan is to feature merchandise co-created with Paris fashion designer Sophie Mechaly, the founder of the international brand Paul & Joe.

    “We wanted to give our coffee-related merchandise a unique style and attitude for summer,” says Starbucks Taiwan president John Hsu.

    Starbuck - Paul & joe 4

     

    Starbuck - Paul & joe 3

    Mechaly founded Paul & Joe in 1995, and the label now has several dozen boutiques and hundreds of retail stores around the world. Méchaly designs clothing, shoes and accessories for both men and women.

    Starbuck - Paul & Joe

    Starbuck - Paul & joeSeveral of the Starbucks merchandise designs feature a Chinchilla Persian cat owned by Mechaly. Crabs and fish also feature in the artwork to represent the beaches in the Mediterranean, near her childhood home.

    Starbuck - Paul & joe 1

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  • Starbucks stores in Taiwan and Hong Kong use a mix of historic and new design elements to …

    Starbucks stores in Taiwan and Hong Kong use a mix of historic and new design elements to …

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  • How big brands can make online marketplaces work

    How big brands can make online marketplaces work

    Online marketplaces, those giant shopping sites like eBay and Amazon Marketplace, can be a mixed blessing for brands and merchants.

    Marketplaces offer retailers broad exposure to millions of consumers, as well as delivery, payment and other solutions. Still, most marketplaces leave merchants wanting in one very important aspect: brand control. While the platforms provide virtual shelf space for listing products, merchants are generally limited to one-size-fits-all templates for their online storefronts—thus restricting their ability to set themselves apart from rivals with brand-building presentations and content.

    Not all marketplaces are created equal, however. In China, where marketplaces are overwhelmingly favored by online shoppers, e-commerce leader Alibaba Group has been returning branding power to merchants through the company’s Tmall.com B2C marketplace.

    Tmall, which positions itself as China’s top online destination for domestic and foreign branded merchandise, has developed a suite of tools that allows merchants to customize their Tmall.com storefronts with the logos, fonts and colors for which they’re known the world over, as well as with videos, interactive features and other content. Moreover, merchants can combine these tools with Alibaba’s trove of data on shopping behavior to tailor their storefronts to individual consumers visiting their e-shops at any given moment.

    This approach gives merchants far more than a place on the internet to list and sell products. It offers them the ability to present their brands as effectively as they do on their company-run websites, boosting their opportunity to reach consumers among Alibaba’s 400-million-plus active buyers and build lasting customer relationships. Merchants “have total control,” said Paul Fu, the San Mateo, California-based head of Alibaba’s User Experience Design team.

    This is a significant departure from the “one webpage to serve them all” marketplace model. Tmall offers as many as 55,000 different storefront templates across about 30 different business sectors for merchants to choose from. Another 3,000 templates exist for product pages, and there are a thousand designs for marketing material such as e-mails and SMS alerts, according to Fu. If these packaged solutions don’t satisfy certain merchants, they can design their own right down to the page breaks and <p> tags, and then upload the code to Tmall.

    Major international brands have used this enhanced flexibility to build unique and engaging Tmall storefronts. For example, GoPro, the U.S.-based maker of wearable video cameras, produced a series of videos that appear on its storefront showing GoPro cameras being used in extreme situations, such as geologists staring into the mouth of a volcano or snowboarders doing double backflips as they race down a mountain.

    The Tmall storefronts of other household names such as Starbucks, L’Oreal, Maserati and Zara also offer fully branded experiences that experiences that mirror the look and feel of their corporate e-commerce sites, including multipage navigation according to product category and even full brand histories. Still others take the experience a step further in an attempt to boost the time consumers spend on their pages. Case in point: L’Oreal in the past has given consumers easy-to-follow guides and tips for using its beauty products.

    L’Oreal engaged consumers with hair-coloring tips posted on the company’s Tmall storefront.

    Fu says that Tmall storefronts are based on so-called “responsive” design, which means they look as good on mobile devices as they do on the web. But customization options for Tmall storefronts go even deeper.

    Using consumer data collected by Tmall, merchants can present not just personalized product recommendations based on shopping history to storefront visitors, they can also offer different homepages tailored to particular types of shoppers. For example, German personal-care brand Nivea displays three different storefronts on Tmall depending on whether a shopper is a first-time visitor, new buyer or loyal fan. First-time visitors are shown low-cost products that may tempt them to experiment with the brand. Fans, meanwhile, see sets of higher-value products bundled together as a way to boost their total purchase.

    Three different customers, three different mobile presentations. First-time visitors, new buyers and loyal fans all see products tailored specifically to them when they visit Nivea’s Tmall site.

    By making it possible for merchants to tag and manage their customers by attributes and personalize storefronts for each visitor, individual customers are exposed to highly relevant content, which drives higher conversion rates. Fu said after Nivea implemented personalized storefronts, “the data showed that the browsing conversion rate was improved by 70 percent and transactions increased by 150 percent—more than double the previous number of purchases,” he said. Browsing conversion is the rate at which shoppers click through to find out more about a product.

    Fu says Alibaba analyzes buyers based on five different behaviors: attention, interest, decision, action and sharing, all of which are part of the Tmall shopping cycle. A certain product may draw the attention of a shopper, which prompts him or her to click through to the seller’s store where they can learn more about the item. Then they decide whether or not to bookmark it or add it to their shopping cart; a purchase constitutes action. Sharing comes after, once a consumer tells a friend about their purchase or leaves a review on a merchant’s Tmall store.

    “We provide this capability for the seller to do these kinds of very sophisticated analyses,” Fu said. “Later, because we opened up this technology and data [to merchants], the seller can come up with their own model to do the analysis.”

    Still more tools are to come. Merchants currently log into a content-management system of sorts that lets them set up and manage their storefronts, including text, photos and slide show placement. They can also choose the products they want displayed as recommendations when a shopper is viewing, say, hand cream or razors or a sweater. Up next is a tool that will allow merchants to create banner advertisements on the fly, rather than turning to a designer to handle what is often a time-consuming task. That’s expected this quarter.

    Tmall also helps merchants synch their online stores with their bricks-and-mortar outlets. Fu said the goal is to make sure all points of sale are linked up, including mobile, desktop and offline. One key advantage for merchants to this so-called “omnichannel” approach is the ability to manage inventory across physical and virtual sales channels. Another is the ability to know a buyer’s location so that the nearest warehouse is used for shipping, which speeds up delivery.

    “All areas of the ecosystem are working together for merchants,” Fu said. “Before they had to figure this out on their own. But now we’ve come up with a system, and built the right tools to help them.”

    * Originally published by Alizila.com – the independent, but Alibaba Group-funded website of news about the Chinese eCommerce giant.

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  • Starbucks: New Stores Are Nice, But Here’s The Real China Domination Plan

    Starbucks: New Stores Are Nice, But Here’s The Real China Domination Plan

    Last week, I reasoned why Starbucks’ growth plans in China would lay the foundation for the company’s ultimate success in the long-term. Put simply, China will make you rich as a Starbucks shareholder.

    The “long game,” as CEO Howard Schultz describes it, includes opening 500 locations per year for the rest of the decade, to build on the 2,000 stores the company has in 100 cities.

    But growing its store base isn’t the only plan. While expansion is a driving factor for long-term growth, the company’s plans in the short-term should make shareholders very happy as well: digital growth.

    In 2014, Starbucks really started to press forward with its mobile app ambitions. Schultz predicted the drop in mall traffic and strain felt by traditional retailers as a result. While he talked about the revolutionary features the app would bring, the stock price languished, trading sideways for much of the year.

    But in 2015, we saw a rejuvenated stock, one that climbed almost 50% as its app-based payment method accelerated sales growth in the U.S. This year, look for Mobile Order and Pay to be the driver in the U.S., and for delivery to boost results next year. It’s why the Americas segment boasts such strong same-store sales growth, up another 7% last quarter despite growing comps 7% in fiscal 2015.

    To say the company’s digital efforts have made an impact would be an understatement. It increases the brand strength, encourages higher spending, more loyalty and gift card loading. It was a total game-changer, and it remains that way today.

    That’s why taking it over to China will make an enormous impact.

    Several times, and most recently in the latest quarterly conference call, Schultz has referenced that the company is bringing its digital presence across the Pacific.

    I am more convinced ever that… as we fully roll out our new partnerships with the leading digital companies and brands in China and leverage our unique digital, mobile, card, gifting, and loyalty programs across our business in China later this year and ultimately across CAP overall, we will perform at even higher levels of success and profitability in the future than we do today.

    Although revenues respectfully climbed 18% and 14% in China/Asia-Pacific last quarter, I would look for a deeper mobile push in China to be like gasoline on the fire.

    Taking a peek at the most recent conference call from Alibaba (NYSE:BABA) sheds some light on the mobile/online retail world of China (bold emphasis added):

    So retail sales is going against the grain of what many consider to be a decelerating economy. And that’s because the shift of the Chinese economy is going from investment-driven to consumption-driven… e-commerce penetration continues to grow and that is largely because Alibaba is behind driving that penetration of online commerce. And we’ve seen a very massive shift of users going online, that’s because of the advent of the mobile device.

    Starbucks is also a beneficiary of this move, even though sales aren’t done online necessarily, but through a mobile device. I know this doesn’t seem like a big deal to some, but when shares were trading sideways throughout 2014, that’s when the company was gearing up to unleash its mobile potential.

    SBUX Chart

    Despite the doubters, Schultz continued to stress the “flywheel effect” that Starbucks’ digital efforts would create, and boy was he right. It has propelled the Americas segment to new heights and it will continue to do so going forward.

    There’s no reason China will be any different. Although recent comps in CAP have been disappointing by many analysts’ expectations, I think this will help to drive them higher later this year and throughout fiscal 2017. Given that CAP comps have been underwhelming this year, it should also be a low bar to hurdle next year.

    So while increasing the store footprint in China is the right thing to do for the long-term, the digital expansion was absolutely necessary for the short and intermediate term. Especially for such a big and technologically-driven Chinese market.

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  • Coffee wars: South Korea’s cafe boom nears saturation point

    Coffee wars: South Korea’s cafe boom nears saturation point

     

    In fashionable retail and commercial districts of southern Seoul, nearly one in every two buildings boasts a coffee shop – evidence of a boom that has delivered dizzying growth for the likes of Starbucks and local chains.

    But now the market is getting even more crowded, as convenience stores such as 7-Eleven offer 1,000 won (87 cents) cups, and smaller players are feeling the heat.

    “We declared an emergency situation, gathered all employees eight times to debate strategies,” Moon Chang-ki, CEO of mid-priced coffee chain Ediya, the country’s largest operator by location with about 1,800 stores, told reporters recently. “If we sell at that price, our store owners won’t earn any margins.”

    To compete, Ediya says it has instead focused on improving the quality of its coffee, and actually raised prices last year. Other chains have responded to growing competition by cutting back on store numbers and staff, or expanding overseas.

    The number of chain and stand-alone coffee shops in South Korea more than tripled to about 49,600 in 2015 from 12,400 in 2011, according to Korea Contents Media – far faster than overall consumption of coffee, which Koreans have been drinking for decades.

    PEAK COFFEE

    South Korea’s per capita coffee consumption has nearly doubled since 1990 to 2.3 kg (5 lb) per person, according to the International Coffee Organization – still roughly half the 4.5 kg that Americans consume.

    Revenue growth at coffee chains in the country slowed to about 8 percent in 2014, however, from more than 20 percent annually between 2008 and 2012, analysts say. While the number of new coffee shops in Seoul increased, so did closures, according to city data.

    Brewed coffee sales at 7-Eleven, run by Lotte Shopping’s Korea Seven Co Ltd, jumped 88 percent in 2015 after it introduced drip coffee early last year costing about a dollar, almost one-fifth the cost of an average Starbucks cup.

    McDonald’s Corp stores cut coffee prices to 1,500 won from 2,100 won early last year, and have seen sales of the beverage almost triple, the company told Reuters.

    By contrast, local chain Cafe Droptop, with about 225 shops, cut about 20 percent of its workforce at the end of 2015. Another chain, Coffine Gurunaru, with about 100 shops, incurred combined operating losses of 2.5 billion won ($2.2 million) in 2013 and 2014 after being profitable in the previous two years, filings show.

    “Even fried chicken restaurants and pubs are adding coffee, trying to be a cafe, while espresso machines are spreading in offices,” said Lee Kyung-hee, who heads the Korea Business Strategy Institute, a consultancy. “The coffee industry is fighting a war without borders.”

    GOING ABROAD

    Starbucks entered the market in 1999, and is widely credited with starting the country’s habit for splurging on higher-quality coffee and creating a cafe industry SK Securities said was worth about 2.5 trillion won ($2.2 billion) in 2014.

    Starbucks Coffee Korea, a 50-50 joint venture between the world’s biggest coffee chain and South Korean hypermarket operator E-Mart, now has 860 stores, putting the country behind only China and Japan as the company’s biggest markets in Asia, with sales more than doubling between 2011 and 2014.

    It posted a 20 percent increase in net profit to 30.77 billion won in 2014, the most recent year for which results are available, on revenue of 617 billion won, up 28 percent.

    But with industry growth slowing, some chains have been pushing abroad.

    Caffe Bene, which reached 932 domestic stores in 2014 before trimming back to 850 at the end of March, posted a 3.3 billion won net loss in the first three quarters of 2015, according to the latest public data.

    Last month, a joint venture between Singapore’s Food Empire and Indonesia’s Salim Group acquired a 38 percent stake in Caffe Bene, becoming the second biggest shareholder after South Korean private equity fund K3 Equity Partners.

    The chain said it was looking to expand in Southeast Asia to drive growth.

    Zoo Coffee, with 65 domestic shops, has opened about 200 franchise stores in China since entering the country in 2013 and in December announced a tie-up with China’s giant Dalian Wanda Group to open 50 stores per year there.

    Cafe Droptop in November opened its first overseas outlet in Shanghai.

     

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  • Starbucks China sales soar 18 per cent

    Starbucks China sales soar 18 per cent

    Starbucks China has recorded a massive 18 per cent increase in sales in the second quarter, fuelled by a 5 per cent increase in transactions.

    The Chinese boost was one of a string of highlights in the quarter in which Starbucks set a new sales record of US$5 billion globally, up by 6 per cent on a same-stores basis.

    The Seattle-based coffee giant served nearly 16 million more customer occasions worldwide in the three months to March 27, 12 million of those in the US where it is experiencing a resurgence.

    Earnings per share rose 18 per cent to a record 39 cents, with US and Americas comp-store sales up 7 per cent. Operating profit rose 11 per cent to a second quarter record $878 million, its operating margin up to 17.3 per cent.

    Starbucks boosted its worldwide store network by 350 to 23,921.

    CEO and chairman Howard Schultz described the Starbucks China performance as “stunning” and said the overall financials underscored the strength of the brand and the resilience of the global retail and consumer packaged goods business.

    “Loyalty, technology and innovation are continuing to fuel our digital flywheel and propel our business forward all around the world.”

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  • Starbucks Corporation Growth Falters, but Remains Steady in China

    Starbucks Corporation Growth Falters, but Remains Steady in China

    Starbucks Corporation posted its second quarter financial results for the fiscal year 2016 (2QFY16), after the closing bell yesterday. The world’s leading coffee chain posted a 16.3% growth in earnings, as it continued to benefit from rapid expansion and growth.

    Earnings per share (EPS) for the second quarter came in at 39 cents, in-line with the Street’s expectations. Net income was registered at $575.1 million, higher from $494.9 million or $0.33 per share, reported last year.

    Even though sales missed analysts’ expectations, the company’s president claimed it to be a record quarter, as the reported revenues outdid all preceding non-holiday quarters. In total, the $4.99 billion sales registered a 9.4% growth, from comparable quarter last year, when the company reported $4.56 billion in sales. The company lagged behind analysts’ $5.03 billion revenue estimates, by $40 million.

    The company has aggressively worked to expand its physical footprint abroad; it recently disclosed plans to launch outposts, in Germany and Italy. Starbucks also opened its first store in South Africa, yesterday. For the quarter, the company opened a total of 350 stores globally, bringing the total to 23,921 stores worldwide.

    And yet, sales growth fell shy of the Street’s estimates. Global sales from stores established for at least a year, improved just 6% for the period ending March 27. This included 2% improvement in store traffic globally, and 4% growth in average ticket. The global comps, which reflect a 200 basis points deceleration from the last quarter, disappointed investors; the company recorded 8% growth in the metric in the previous quarter.

    Disheartened investors offloaded their holdings, as the stock took a downturn in the after-hours trade and tumbled as much as 5%, to $57.58 per share. The losses trimmed down in early market hours today; the stock is now down 2.7% to $59 apiece, as of 4:00 AM EDT.

    Sturdy Domestic Numbers

    Though global same store sales were slower than expected, region-wise growth was better than expected. “We posted 6 percent increase in comps globally, but if you go region by region, there is a story under each of those regions,” commented Starbucks’ president and chief operating officer, Kevin Johnson, in the earnings release.

    By region, the Americas and the US segment posted a 7% comp growth, which was the highest for the quarter, followed by a 3% growth in the China/Asia Pacific region. Europe, Middle East, and Africa (EMEA) region reported a 1% comps growth, as the foreign currency headwind against euros and pounds continued to affect international sales.

    Growth in the US and the Americas played out well, due to the company’s constant efforts in the region. The company targets to double food revenue, from domestic flagship revenues. In this regard, it has made efforts to get more people to sign up for its mobile app. Starbucks looks to diversify its menu and push food beyond the coffee lineup, to include salad boxes and breakfast sandwiches. This strategy has played out well, as food ascribed to more than 20% of total US sales, for the quarter.

    The company’s digital initiatives, including its mobile app, have helped Starbucks report a 9% growth in global revenues. According to the earnings call, the company’s investment in mobile initiatives, including the mobile order and pay app, has made it convenient for its users to make purchases at the store. This has resulted into significant growth, on the domestic front.

    Starbucks disclosed that mobile usage and orders have nearly doubled from the comparable quarter last year. The company has processed eight million mobile ordered and paid transactions, on a monthly basis. According to an analyst at RBC Capital Markets, a normal mobile app user spends nearly three times as much as a store going customer, which can play out nicely for the company’s future revenues.

    Doubling Down on China

    Despite a slight deceleration in global comps, the company has managed to report $5 billion in a record profit, for a non-holiday quarter. China outdid all other regions, as transactions in the country grew by 5%. This growth resulted in a remarkable 18% growth in revenues.

    “Starbucks recorded Q2 financial and operating performance – including a stunning 18% increase in revenues and a 5% increase in transactions in China – underscores the strength of the Starbucks brand and the resiliency of our global retail and CPG businesses,” stated the company’s chairman and CEO, Howard Schultz. “Loyalty, technology and innovation are continuing to fuel our digital flywheel and propel our business forward all around the world.”

    With hopes of continued growth in China, the company would add 500 stores each year in the country, in a move that could make the Asian country, one of the busiest Starbucks’ markets worldwide. A new store is set to be launched in mid-June, at the entrance of the newly opened Shanghai Disneyland. As it intends to cash-in on Disney World’s popularity, the company expects the launch to become the company’s “highest grossing retail store overnight.”

    While Starbucks continues to underscore the global nature of its rapidly expanding business, Mr. Schultz commented in the conference call: “Starbucks is only getting started” in China. Though the company didn’t divulge on profit contribution from the country, China and the Pacific Region in total reported 15% growth in profits.

    In fiscal year 2016, the coffee chain has plans to launch 1,800 new outlets globally. With nearly 700 outlets planned for the US, the company plans to open around 900 in the Asia Pacific region. For the year, consolidated revenues are expected to grow by 10%; the GAAP EPS is expected to fall anywhere in the $1.85-1.86 range. For the third quarter, EPS is expected to clock in between 47-48 cents apiece.

  • Starbucks China convinces suppliers on ethics

    Starbucks China convinces suppliers on ethics

    Ten years ago when Starbucks China hosted its first suppliers summit there were just 10 people present.

    This year, more than 350 supplier representatives were in Shenzhen to hear the coffee giant’s pitch to join its commitment for a sustainable, ethical supply chain.

    “We studied the leadership position we were taking to get high-quality coffee,” said Kelly Goodejohn, director, Starbucks ethical sourcing. “We wanted to build something similar for other products that we source.”

    Similar to coffee, Starbucks wanted to understand where manufactured goods were sourced, how farmers and workers were being treated and the impact the suppliers were having in local communities. The summit served as a starting point to gain more of this knowledge, no matter what the products being sourced are.

    “It was an awareness opportunity,” said Goodejohn. “What we found was that many of our suppliers shared our values, wanted to do more for their employees and communities, but didn’t know how to do it.”

    The 10th Annual Supplier Summit this week featured Starbucks leaders, representatives of nonprofits and industry experts. During the event, Starbucks shared key company initiatives, discussed global responsibility goals and provided tools and resources to help suppliers improve business practices.

    Starbucks China

     

    Building trust

    Back in 2006, at that first summit, one of Starbucks goals was to cultivate a stronger rapport with suppliers.

    “Building authentic relationships with our suppliers was important as well as working with them to make improvements,” said Goodejohn. “Over time, we have worked with our suppliers in China to improve labor and environmental performance to enable higher overall performance, so they are positioned to grow with Starbucks as our business grows.”

    At first, not all suppliers were willing to take Starbucks at face value.

    “It was difficult to build trust, but we got there,” said Goodejohn. “While some suppliers moved on, the majority were willing to work with us and are still our suppliers today.”

    Starbucks has worked with suppliers to improve worker health and safety, ensure employees get paid a fair wage, provide better living conditions at factory dormitories and confirm that products are made without emitting dangerous chemicals to protect water and air.

    Three years ago, Starbucks incorporated community service into the supplier summit to highlight an important aspect of the company’s mission.

    On Wednesday, suppliers, Starbucks partners (employees) and customers convened for a beautification and career development service project at the Shiao Community and the Young Dream Center in Shenzhen. The project is one of many that the company will engage in during its Global Month of Service that takes place throughout the month.

    Sharing knowledge

    As a way to support suppliers on the ground year-round, Starbucks hired two field managers in China to help implement best practices related to social and environmental performance. They teach factory managers and work on continuous improvement with suppliers.

    “I’m immensely proud of what we’ve done and the partners who are elevating ethical sourcing with suppliers on a regular basis,” said Goodejohn.

    “We have many countries that manufacture goods for us and we can bring the learnings from China to other regions. We have the right momentum and we will keep moving.”

  • Price war scratches Korean espresso chains

    Price war scratches Korean espresso chains

    Major franchised Korean coffee chains saw their revenue fall in 2015 in the face of tougher competition with cheap take-out coffee amid economic slowdown, heading to another tough year, data shows.

    Homegrown coffee brands have sprung up in Asia’s fourth-largest economy over the past decade to capitalise on the growing population of coffee drinkers, but their growth has slowed recently in the saturated domestic market.

    Adding to their woes, low-cost coffees at convenience stores and mini take-out stalls have enjoyed growing popularity among price-conscious consumers, posing a threat to franchise coffee shops standing on every corner of major streets.

    Coffee Bean & Tea Leaf, an American franchise chain owned by Seoul-based Mirae Asset Private Equity Fund, posted 138.9 billion won (US$121.3 million)  in sales last year, down 5.1 per cent from a year ago, its regulatory filing showed. Its operating profit tumbled 68.5 per cent to 3.9 billion won, although the number of its shops increased by just nine to 234 during the period.

    Paul Basset, a specialty coffee house operated by Maeil Dairies Co, said it logged 48.4 billion won (US$42.3 million) in sales, but its net swung to a loss of 180 million won due to rising marketing costs and aggressive store expansion.

    Sales at Caffe Bene sank 14.9 per cent on-year to 121 billion won, expanding operating loss nearly four times to 11.4 billion won due to slumping businesses of other food franchise subsidiaries.

    While mid-end franchise stores had a sluggish year, brands at both ends of the price spectrum were largely unscathed by the latest consumption trend.

    Ediya, a low-end coffee shop with the largest number of outlets – over 1500 nationwide – raised 135.5 billion won in sales, up 16.5 per cent from a year ago. It plans to expand its network to 2000 this year.

    And sales at US coffee giant Starbucks also rose 25.4 per cent on-year to 773.9 billion won (US$675.7 million) in 2015 on the back of high-end specialty coffee service and bakery items.

    Another tough year is awaiting the major coffee brands as convenience stores have been aggressively expanding in-store coffee services nationwide. Their coffee is considered drinkable at a price as cheap as 1000 won, about a quarter of Starbucks’ tall Americano sold at 4100 won in South Korea.

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  • Starbucks baristas vie for best of Asia honour

    Starbucks baristas vie for best of Asia honour

    Starbucks baristas from across Asia took part in the first Regional Barista Championships in Hong Kong.

    The contest, held before more than 600 spectators, drew 2000 entries from markets including China, Thailand, Hong Kong, Malaysia, Japan and Indonesia before the field was narrowed to the final 14.

    Finalists were judged on coffee knowledge, beverage mastery and customer service. Each partner had 20 minutes to demonstrate technical and communications skills, craftsmanship and knowledge of the barista profession.

    “Our judges group, made up of eight partners and one guest who is an accredited global coffee-competition judge, was immensely impressed and inspired by the professionalism and passion demonstrated by the final competitors,” said Major Cohen, senior project manager, Starbucks Global Coffee.

    The top three partners from round one of the finals were:

    • Nopparat “Yong” Arpornsuwan who joined Starbucks Thailand in 2002 as a part-time barista and is currently the store manager at the Baan Chart Khaosan Starbucks in Bangkok. She has a personal connection and understanding of coffee, having grown up near coffee farms in Thailand.
    • Hirokazu Terasaki of Japan, who joined the global coffee giant because of the friendly service culture a year ago. He is now an assistant store manager at the Maguro store in Japan.
    • Ryan Wibawa of Indonesia, who became a part-time barista with Starbucks in 2011 and just two years later was designated as a Coffee Master. Now a full-time shift supervisor at the first Starbucks Reserve store in Indonesia, Wibawa earned first-place honors in the first Indonesian Brewers Cup Championship finals in November 2015.

    Starbucks partners from China and Asia Pacific region finalists in the first Regional Barista Championships in Hong Kong. From left: Wibawa, Terasaki and Arpornsuwan.

    Arpornsuwan took top honors, based on her “perfect execution, personal storytelling and knowledge of coffee sourcing,” to become the first Starbucks Barista Champion. She was awarded a first-place trophy, a hand-crafted leather roaster brewers kit complete with coffee and accessories, and a three-week coffee experience in Seattle, which will include a visit to the first Starbucks at Pike Place Market and a tour of Starbucks Reserve Roastery and Tasting Room.

    Starbucks will celebrate additional barista champions across the globe in 2016. The company will host the Europe, Middle East and Africa Barista Championships and US Barista Championships later this year.

  • Growth plan for Starbucks Vietnam and Cambodia

    Growth plan for Starbucks Vietnam and Cambodia

    Dairy Farm Group says it plans to expand its Starbucks Hong Kong and Vietnam networks.

    Last year, Dairy Farm opened six new Starbucks Vietnam cafes and its first in Cambodia – in the capital city Phnom Penh last December.

    “This new market offers significant opportunities as there is no dominant market player,” said CEO Graham Allan. “The group is currently working to fully understand local tastes and preferences.”

    In Vietnam, the company says it will continue – for now – to focus expansion in the main cities of Ho Chi Minh and Hanoi.

    Starbucks operations in Vietnam, Cambodia and Hong Kong – where the network is also set to be expanded this year – is operated by Dairy Farm’s restaurant subsidiary Maxim’s.

    “Maxim’s delivered another year of solid results,” Allan said in the company’s annual operational review.

    “Expansion of its Chinese casual dining restaurants and Japanese restaurants continue in Mainland China.”

    Maxim’s opened 44 net new outlets during the year, including six in Mainland China and the new Starbucks outlets.

    Dairy Farm’s restaurants division reported US$1.9 billion in total sales, representing an increase of 8 per cent year-on-year, while the profit contribution increased by 9 per cent as the business delivered another year of record earnings.

    “Looking ahead, the macro economy and local business environments are expected to be challenging in 2016, with continued currency volatility and fragile consumer confidence,” said Allan.

    “The group sees exciting prospects, however, with a number of establishments opening at the Shanghai Disney Resort in June 2016, including the staff canteen, The Cheesecake Factory and Japanese chain concepts Ippudo and Dondonya.”

    He said besides expanding in Vietnam and Cambodia, Maxim’s will continue to explore further opportunities for acquisitions and/or franchising throughout Asia.

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  • CapitaLand China growth outpaces economy

    CapitaLand China growth outpaces economy

    Singapore-based shopping mall investment company CapitaLand Retail China Trust (CRCT) grew its income last year by 10.3 per cent to S$89.2 million ($63 million) from S$80.9 million.

    With China’s economy growing 6.9 per cent last year, the company’s retail sales drew 10.7 per cent of RMB30.1 trillion ($4.58 trillion), reports CRCTML chairman Victor Liew (CRCTML manages CRCT).

    “China’s slower growth is reflective of an economy undergoing transition, but it is expanding from a much larger base now and its growth is still considerably faster than those of most other economies,” says Liew. “CRCT’s family-oriented shopping malls are well-placed to benefit from China’s growing urban population and rising retail sales as domestic consumption becomes the country’s new growth engine.”

    It was the first time CapitaLand China’s gross revenue had crossed the RMB1-billion mark, says CRCTML CEO Tony Tan. “Portfolio occupancy remained high at 95.1 per cent  as at December 31, while rental reversion for the full year was 8.1 per cent.

    “Annual tenants’ sales increased 11.6 per cent and shopper traffic rose 1.8 per cent year-on-year.

    “We continually refresh our mall offerings to stay relevant to our shoppers’ evolving preferences and needs. For example, CapitaMall Xizhimen (pictured) brought in the popular Jing Ge Steamboat to increase the variety of its F&B offerings, while CapitaMall Qibao introduced a water park.

    “To improve sustainability and the shopping experience, CapitaMall Grand Canyon installed energy-saving LED lights in common areas and upgraded its car park with new flooring.

    “CapitaMall Wangjing is carrying out renovation work to rejuvenate its façade, and is on track to unveil its new look by June.

    “We will continue to strengthen our malls’ tenant mix and uplift the shopping experience through continual asset enhancement initiatives.”

    Gross revenue for the year increased RMB17.5 million, or 1.8 per cent, over the previous year. This was attributed mainly to rental growth from the multi-tenanted malls, partially offset by lower revenue fromCapitaMall Minzhongleyuan, which was impacted by road closure for the building of a subway line, and from CapitaMall Wuhu, where tenancy adjustments are being introduced to achieve stronger positioning and better trade mix.

    CRCT is the first China shopping mall real estate investment trust (REIT) in Singapore, with a portfolio of 10 malls. Listed in Singapore in 2006, its objective is to establish long-term investments in a diversified portfolio of real estate used primarily for retail in China, Hong Kong and Macau.

    A significant portion of CapitaLand China’s properties’ tenancies comprises major international and domestic retailers such as the Beijing Hualian Group, Carrefour and Wal-Mart. The anchor tenants are complemented by specialty brands such as BreadTalk, Innisfree, KFC, Nanjing Impressions, Nike,Sephora, Starbucks, Uniqlo, Watsons and Zara.

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  • Korean grocery prices among world’s highest

    Korean grocery prices among world’s highest

    A recent report from a Korean consumer protection agency reveals that the prices of imported fruit, wine, beer and Starbucks coffee in Korea are much more expensive than in other countries.

    According to Consumers Korea, the domestic prices of imported grapes, wine, and domestic pork belly were among the highest levels in the world. The prices of groceries in the major cities of 13 countries were compared.

    The report indicated that 800 grams of American grapes cost 7009 won in Korea, which was twice as high as the price in the U.S. (4069 won), and wine was being sold for an average of 38,875 won, which was 71 per cent higher than the price of wine in the Netherlands (22,681 won), which has the fifth-highest wine prices in the world.

    The price for a kilogram of domestic pork belly (27,930 won) was almost twice as high as the comparable price in China (14,679 won), which was the second-highest among the 13 countries compared.

    The cost of coffee at Starbucks (Americano tall size), domestic beef sirloin (one kilogram, steak), imported sirloin (one kilogram, steak), bananas (Philippines, one bunch), American oranges (one), American grapefruit (one), Coca Cola (1.5l), Heineken (330ml), and Miller (355ml) in Korea were the second highest among the 13 countries compared.

    Of note, the price of Heineken in Korea (2016 won) was 2.9 times higher than the price in the Netherlands (729 won), and the price of Miller in Korea (2203 won) was 2.3 times higher than the price in the US. (960 won).

    Officials from Consumers Korea commented that among the 35 products compared across the 13 cities, the Korean grocery prices of 31 products ranked in the top five.

    “Prices of Korean agricultural products were expensive compared to prices in other countries. Since customs tariffs are being lowered due to different free trade agreements, regulations should be established so that the financial benefits of free trade can be passed on to consumers,” said the officials.

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  • Starbucks Asia performance concerns

    Starbucks Asia performance concerns

    Starbucks’ latest overall figures look impressive- but this first set of results of its new fiscal year show a marked polarisation in performance around the globe.

    In the Americas, the company’s largest market, sales and profits powered ahead. However, the same cannot be said of both Europe and China, where the results were far more subdued.

    Turning first to China and Asia Pacific, at first glance the results do not look too bad, with revenues up by a very solid 32 per cent. However, most of this increase is attributable to incremental revenues from the acquisition of Starbucks Japan early in the last fiscal year.

    A significant 885 net new store openings across the region also helped to boost top line growth.

    Despite this there are two areas for concern. The first is underlying sales growth, which at 5 per cent has come in below expectations; the concern is that some of this is related to a general slowdown in China which, if part of a longer term trend, could harm company earnings.

    The second is the margin position which has deteriorated because of higher wage costs and the change of ownership of the Japanese operation.

    Turning to the Americas: Despite having been accused of “declaring war on Christmas”,  Starbucks’ results showed much more holiday cheer than its generic red cups. Across the region revenue rose by a very respectable 11 per cent, underpinned by 9 per cent comparable growth.

    Operating income also rose by 14 per cent. Tweaks to the menu which saw the inclusion of some more expensive drinks options and an enhanced range of food helped to drive up average ticket across the period.

    The American results were particularly impressive given the warmer weather across most of the holiday period. That this did not deplete sales underscores the habitual nature of Starbucks and its importance as a small indulgence for many of its regular customers. This loyalty has, in our view, been further strengthen by strong take-up of the mobile app which encourages and stimulates regular buying.

    Within Europe and the wider EMEA region, the net addition of 79 stores did little to bolster overall revenue which declined by 6 per cent on a year-over-year basis. Admittedly much of this was related to unfavorable exchange rates but some is also attributable to weak underlying sales growth at existing shops. The impact on profits has been negative, something further exacerbated by the shift to developing more licensed stores which operate at a lower margin than company-owned outlets.

    Looking ahead, initiatives such as the evening sale of alcoholic beverages and an enhanced food menu, will help to further drive productivity in US stores.

    However, Starbucks will need to work harder to ensure that these gains are not diminished by the deteriorating environment in Asia and the lackluster performance in Europe.

  • Starbucks Indonesia reopens stores after attack

    Starbucks Indonesia reopens stores after attack

    Starbucks Indonesia has reopened stores today after yesterday’s terror attack on one cafe in downtown Jakarta.

    In a statement, Starbucks head office in Seattle said it was “deeply saddened by the senseless act” that took place in Jakarta.

    “Our hearts are with the people of Indonesia. Amidst the attack in Jakarta, initial reports are that an explosion took place close to our store in the Skyline building. One customer sustained injuries; our partners (employees) are all confirmed to be safe.”

    The company said it would be business as usual today (Friday) as it works closely with local authorities and looks to them to provide further updates on what transpired as they learn more details.

    “While this store will remain closed, based on the stabilisation of the situation being conveyed by local authorities, we will open all other stores in Jakarta and across Indonesia.”

    The Starbucks cafe was one of three targets by Isis-linked terrorists in Indonesia’s capital city on Thursday. Two people lost their lives in the attacks, along with five suspected terrorists who either blew themselves up or were shot by police.

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