Today, Starbucks China announced a leadership restructuring. Starting from September 30th, Liu Wenjuan will be appointed as the CEO of Starbucks China, while Wang Jingying will continue to serve as the Chairman of Starbucks China.
It is worth noting that at the beginning of this month, Starbucks just changed its global CEO. On September 9th, Brian Niccol replaced Laxman Narasimhan as the chairman and CEO of Starbucks, and Laxman has only been in office for over a year. The frequent high-level turnover is due to the intensified competition in the coffee market, and Starbucks is facing severe challenges.
Liu Wenjuan said, "I am honored to lead Starbucks China into a new stage full of huge opportunities. In the past year, our innovation strength has significantly improved, and our operational level has reached a new level. We have first-class brand influence, and our partner engagement rate has also reached a historic high. I am delighted to work side by side with 60000 partners to expand our unique competitive advantage and establish deeper emotional connections with Chinese customers
According to the data, Liu Wenjuan has been working at Starbucks for 12 years, previously serving as Chief Operating Officer, Vice President of Digital Innovation, and Co CEO of Starbucks China.
Starbucks stated that this decision has been carefully planned, and in the future, Liu Wenjuan will be responsible for leading the company's operations in the Chinese market, focusing on driving sustained growth in the Chinese business.
Starbucks CEO Brian Nichol stated that Molly (Liu Wenjuan) is a respected leader with an outstanding track record of continuously driving innovation and achieving operational excellence in the rapidly developing Chinese market. Looking forward to collaborating with Molly to enhance the Starbucks experience in the Chinese market and build our future oriented business.
From the current situation of the Chinese coffee market, coffee brands such as Luckin Coffee and Kudi continue their "price war" strategy of 9.9 yuan per cup of coffee, and Starbucks China has also launched group buying coupons for 1 cup of 19.9 yuan and 2 cups of 39.9 yuan on different platforms.
From the perspective of performance, on the evening of July 30th, Starbucks announced its operating situation from April to June this year. Among them, Starbucks China's revenue was $734 million (about RMB 5.3 billion), a year-on-year decrease of 10.71%. According to the financial report, as of June 30th, Starbucks China has a total of 7306 stores.
It is worth mentioning that Starbucks China's change of leadership comes at a time when Starbucks is embarking on a transformation. On August 13th, Starbucks appointed Nicole as CEO. According to Nicole's first open letter on September 11th, he promised to return to Starbucks' original intention, redefine Starbucks' positioning as a community caf é, and strive to enhance the store experience.
What will be the development focus of Starbucks China in the future? Liu Wenjuan once said after Starbucks released its third quarter financial report for the 2024 fiscal year, "Faced with the profoundly changing industry competition landscape, same store sales and other data will inevitably be affected in the short term. Starbucks China's focus is on staying grounded in the present and growing steadily. The continuous growth of key business data such as net income, store transaction volume, and profit margin on a month on month basis is the current focus of attention for Starbucks China
Liu Wenjuan added, "In the competitive environment of frequent promotional activities, we maintain a high degree of restraint and avoid price wars. At the same time, we adopt targeted and precise pricing strategies to create new sales increments and cultivate customers' consumption habits, which is consistent with our high-end positioning
The unique growth model that Starbucks China is seeking requires proactive strategic choices. Liu Wenjuan further pointed out that firstly, through continuous innovation of Starbucks' unique high-end products and experiences, sales revenue should not be sacrificed at the expense of operating profit margins. Secondly, through rhythmic store expansion planning, we aim to explore huge blue ocean opportunities and ensure top-notch returns and profitability for our stores; Thirdly, continue to invest in Starbucks' partners and provide unique Starbucks experiences to our customers through them.
In fact, the high-level changes at Starbucks China may be related to the challenges currently faced by Starbucks China. For example, the current "headache" situation of Starbucks in the Chinese market. The third quarter financial report for Starbucks' fiscal year 2024 (as of the end of June 2024) released on July 30th this year showed that Starbucks' revenue in China decreased by 10% year-on-year to $730 million, widening the gap with Luckin Coffee; Same store sales have dropped by 14% in double digits.
Subsequently, at the analyst meeting, former Starbucks CEO Simon Yam admitted that China is "one of the most significant international challenges" facing Starbucks.
He said, "In the past year, consumer spending has become more cautious, and at the same time, unprecedented store expansion and large-scale price wars at the expense of same store sales and profitability have caused significant and permanent changes to the market environment
Based on the drastic changes in the market environment, Starbucks is launching a "second entrepreneurship" after 25 years in China. According to Eslite, we aim to "build a new generation of Starbucks" in China.
Perhaps this change in Starbucks China's top management is the beginning of this' second entrepreneurship '.