On July 31st, Starbucks China released its performance report for the third quarter of fiscal year 2024 (April 1st to June 30th, 2024). This fiscal quarter, Starbucks' net revenue was 733.8 million US dollars, an increase of 5% compared to the previous quarter (excluding the impact of exchange rate fluctuations). The three key business indicators of net income, store transaction volume, and profit margin all achieved month on month growth.
In terms of membership count and experience, in the third quarter, Starbucks China Star Enjoy Club saw a year-on-year increase of 1.6 million members, with a record breaking 22 million active members, an increase of 1 million from the previous quarter, and a total membership of over 132 million; At the end of June, Starbucks China reached an innovative partnership with Hilton Group, upgrading the experience for Star Enjoy Club members.
In terms of product innovation, in the third quarter, Starbucks China continuously innovated and launched up to 17 new drinks, which not only enriched consumers' choices but also attracted a large number of new members, especially young Generation Z customers.
In terms of sinking markets, Starbucks added 213 new stores in the third quarter, with a year-on-year increase of about 13% in the number of new stores, and entered 38 county-level markets. As of now, Starbucks has 7306 stores in over 900 county-level markets. We will continue to explore huge blue ocean opportunities and serve more communities. According to the current pace of opening stores, the number of new stores opened this fiscal year will break records, "Starbucks told reporters.
In the face of profound changes in the industry competition landscape, same store sales and other data will inevitably be affected in the short term. Our focus is on the present and steady growth. The continuous growth of key business data on a month on month basis is our current focus of attention. "Liu Wenjuan, Co CEO of Starbucks China, told Securities Daily reporters," The market environment we are in has undergone significant and permanent changes, but our China business remains strong and profitable, with first-class returns and growth opportunities. We are confident in further growth in the future
When it comes to price competition, Liu Wenjuan said that in the competitive environment of frequent promotional activities, the company maintains a high degree of restraint and avoids price wars. At the same time, the company has adopted targeted and precise pricing strategies to create new sales growth and cultivate customers' consumption habits.
Regarding the Chinese market, Starbucks' global CEO, John F. Smith, said, "Starbucks will establish its business in China around three principles: first, customer experience comes from excellent partner experience; second, there is still a lot of room for growth in penetration rate; third, stores will continue to serve the local community. Even in a challenging market, the company will always adhere to its principles and relatively high-end positioning
In the eyes of industry insiders, the growth potential of the Chinese coffee market is enormous, and Starbucks' business development in China is healthy, with first-class returns and abundant growth opportunities. On the one hand, Starbucks is actively deepening the popularization of coffee culture among its large and continuously expanding coffee consumer group, and is committed to cultivating more consumers' habits of integrating coffee into their daily lives; On the other hand, Starbucks is constantly innovating its strategies to attract and promote coffee consumption among new and loyal customers, further expanding its market share.
Zhu Danpeng, Vice President of Guangdong Food Safety Promotion Association, told Securities Daily reporters that with the market sinking and the continuous expansion of coffee consumption groups, Starbucks has demonstrated a stable market position through strategies such as new store expansion. Starbucks has a high brand tone, and its brand effect, scale effect, fan effect, and market penetration strategy together constitute its core competitiveness for sustainable development. With the growth of industry consumption base and the increase in per capita coffee consumption in China, top enterprises such as Starbucks will enjoy more consumption dividends, and their risk resistance, comprehensive strength, and market barriers will be further enhanced.