Starbucks deepens its expansion in Asia as it opens store in Vietnam

Starbucks Corp. tp open store in Vietnam

Starbucks Corp. tp open store in Vietnam

On the 3rd of January, Starbucks Corp. informed that it would launch its first café in Vietnam in February 2013. The decision comes as the Seattle-based company is trying to expand its presence in the Asia-Pacific region.

Starbucks café in Vietnam

According to a statement released by Starbucks Corp., the first Starbucks café will be launched in February 2013. The store will be run by Maxim’s Group.

Starbucks Corp. expects that it will encounter fewer problems in Vietnam than in China as Chinese consumers are known to be devoted to tea. On the other hand, Vietnamese customers are famous for their fondness for coffee which is not so surprising as Vietnam is one of the world’s largest producers of coffee beans. While promenading along the streets, one can see many coffee shops around in Vietnam.

Data indicates that Vietnam is the world’s second-biggest producer of coffee beans just behind Brazil. And even though approximately 90 percent of Vietnam’s production is for export, analysts note that unlike beans from Brazil and Ethiopia, Vietnamese beans are usually used to produce cheap instant coffee. However there is a visible trend showing that more and more farmers have been deciding to grow better quality arabica beans.

It is worth noting that Starbucks Corp. has already a history with Vietnamese beans; it has been purchasing beans from Vietnam for some time. John Culver, president of Starbucks Coffee China and Asia Pacific, underlined: “Starbucks is deeply respectful of Vietnam’s long and distinctive local coffee culture. We know coffee is a national pride for many Vietnamese and as such, we look forward to contributing and growing Vietnam’s already vibrant coffee industry,” adding that the Seattle-based company would buy even more coffee beans for Vietnamese farmers in the near future.

The Starbucks café in Vietnam will mark the beginning of the Seattle-based company in that market. Vietnam will be the 12th market in the China and Asia Pacific region, and 62nd in the world. Some analysts believe that Starbucks Corp. might face some difficulties in the Vietnam’s market as the country uses less coffee per capita than its neighbors, including Thailand.

Starbucks’ expansion in Asia

The news on the launch of the Starbucks’ café in Vietnam comes not so long after the Seattle-based company opened its first outlet in India, thereby highlighting the pace of expansion. The decision is a visible sign that Starbucks Corp. intends to continue its expansion in Asia as it sees it potential.

Yet it is not surprising that Starbucks Corp. carries on with its expansion in the Asian market as it wants to boost its sales. Since 2009 Starbucks Corp. has seen U.S. sales growth stall, therefore the company does whatever it takes to overcome these “temporary problems” in the homeland. And the Asian market seems to be ideal to boost Starbucks sales as it is the company’s fastest growing retail market. Just in December 2012, Starbucks Corp. informed that China would become its no. 2 market in 2014 and would be only behind the U.S.

Yet Starbucks Corp. does not want to depend only on coffee admirers. The Seattle-based company widens its assortment also by acquisitions, including the $620 million purchase of Teavana – a well-known American tea retailer. The acquisition is aimed at reinforcing the company’s position in India, China and the Middle East as well.

Christy Gren
Christy Gren is an Industry Specialist Reporter at Industry Leaders Magazine she enjoys writing about Unicorns, Silicon Valley, Startups, Business Leaders and Innovators. Her articles provide an insight about the Power Players in the field of Technology, Auto, Manufacturing, and F&B.

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