Hailing from Seattle, Starbucks has seamlessly integrated itself into numerous cities across Asia, becoming one of the most prevalent coffee brands in the region since entering the market for the first time in 1996.
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In 2023 it is on track to open 400 stores in Asia, which Starbucks has identified as a key engine for its global growth. The emergence of smaller craft roasteries in coffee-obsessed destinations in the region has only compelled the coffee giant to adapt and innovate, leading to new initiatives from first-ever celebrity collaborations to revamped store formats.
In an exclusive interview with Retail in Asia, Emmy Kan, Starbucks’ president, Asia Pacific, discusses how the brand plans to remain top-of-mind for the everyday Asian consumer, from localised market campaigns and destination cafes to environmental strategies in Asia.
RiA: Please tell us why Starbucks continues to look to APAC as an essential market. Can you share more about your plans to expand in the region?
Kan: Asia Pacific has been one of Starbucks fastest growing regions since we opened our first store in Singapore, in 1996. We are now present in 15 markets, with more than 5,000 stores and 62,000 partners. We are on track to open over 400 new stores this year.
Underpinned by rising coffee consumption and a growing middle class, we see tremendous opportunity to bring the Starbucks experience to more customers in Asia Pacific, which has become an engine of growth for Starbucks globally.
We continue to diversify store formats in tandem with changing consumer needs, preferences and lifestyles, meeting customers where they show up. This includes scaling our drive-thrus in the region to cater to customers wanting to enjoy a welcoming ‘third place’ in the neighborhood or a beverage on the move; and bringing the premium coffee house experience through our Reserve Stores to connect with a growing number of coffee enthusiasts in Asia Pacific.
RiA: Are there specific markets that you are excited about when it comes to growing Starbucks’ footprint?
Kan: With its diverse cultures, vibrant coffee-growing communities and dynamic energy, Southeast Asia is particularly exciting. We see continued potential for growth in the region, particularly in India, Thailand, Malaysia, Vietnam, the Philippines, and Indonesia. As these markets continue to urbanise, we’re looking to expand our store presence beyond the metropolitan areas to reach more customers.
In Thailand, where we recently celebrated our 25th anniversary, we plan to expand to 800 stores. Thailand is one of the Southeast Asian markets where we are expanding our Drive Thru stores, catering to the growing number of customers who are seeking out spaces to work remotely or grab a pick-me-up during their journeys.
Thailand is also typical of markets in Southeast Asia where widespread digitisation means our customers demand quick, seamless experiences. Our integrated partnership with Grab, Southeast Asia’s leading superapp, allows us to enhance the Starbucks experience for customers, going beyond food and beverage delivery to include loyalty program integration, in-store cashless payments, and last-mile delivery fulfillment. Customers can skip the line and order their favorite food and beverage items online directly via GrabFood too.
In India we are appealing to consumers with locally-inspired and unique beverage options. Our Masala Chai and Turmeric Latte beverages are designed with our Indian customers in mind. As the market for coffee grows in this vast nation, we are building on our existing portfolio of over 300 stores across 40 cities by extending our footprint into at least five new cities. We are also diversifying our store format offer: we marked our 10th year in India by opening our first Reserve Store in the country last year. The iconic Starbucks Reserve Fort Mumbai in Mumbai is a testament to our long-term commitment to elevate the coffee experience in one of the brand’s key growth markets globally.
RiA: As more and more competitors emerge in the coffee scene, how is Starbucks catering to evolving customer needs and preferences across the region?
Kan: In Asia Pacific we have been innovating, expanding and elevating the coffee industry for more than 25 years. In partnership with our licensees, we have used that time to get to know our customers and their needs.
Home to some of the region’s most diverse coffee- and tea-drinking cultures, Southeast Asia inspires us to develop beverage creations that explore flavors and textures, while celebrating coffee craft in our stores. We plan to grow our Reserve stores across Asia Pacific, bringing customers an intimate, multi-sensory coffee experience. The key to our growth around the world is our stores, the ‘third place’.
Through different store formats, we meet customers where they are and foster connection. It’s no accident that the 5,000th store we opened, in South Korea, was a drive-thru. Starbucks drive-thru stores across Asia Pacific have more than doubled in the last four years, and we plan to add more than 100 stores this year to cater to customers wanting to enjoy a beverage on the move.
We also have one-of-a-kind beautiful destination stores, like the Starbucks Reserve Hiraya in Tagaytay City in the Philippines. The Starbucks Reserve Hiraya store offers breathtaking views of the Taal Lake, so customers can enjoy their favorite beverage in an awe-inspiring environment.
We also continue to push the boundaries of innovation by providing customers with personalised and convenient digital experiences. For example, Starbucks now offers Mobile Order and Pay across 13 markets in Asia Pacific. We are continuing to enhance our digital ecosystem as well as adapt our store design to cater to Southeast Asia’s growing demand for delivery.
RiA: With increasing craft coffee brands across the region, is there room for Starbucks to continue to grow?
Kan: We’re in the human connection business. Starbucks has always believed that coffee can help build community and power human connections. We focus on delivering a premium experience, through the quality of our coffee and the emotional experience we’ve built with our customers, our partners and local communities. That can’t be replicated anywhere else.
Asia Pacific continues to lead beverage innovation, and the region continues to debut iconic beverage collections which are born in Asia but go on to become loved by customers around the world.
We also grow our impact through our passion for meaningful partnerships and our mission to nurture human connection. For example, the recent Blackpink x Starbucks collaboration gave our customers a new way to enjoy the Starbucks Experience. We saw the authenticity and inspiring attitude of Blackpink and were thrilled to partner with them on a regional scale to bring our customers an exciting offering.
RiA: Can you tell us about some of Starbucks’ latest initiatives?
Kan: From the beginning, Starbucks set out to be a different kind of company. We believe it is important to contribute positively to the communities we serve.
As part of our commitment to people, the Asia Pacific region was the first outside of the U.S. to adopt the Community Store programme, which supports the needs of local communities. Globally, we plan to open or dedicate 1,000 Starbucks Community Stores by 2030.
Our largest store in Thailand, Starbucks Reserve Chao Phraya Riverfront at Iconsiam, was recently converted into the second Community Store in the market, one that supports the country’s coffee-growing communities and also hunger relief in communities.
Starbucks in Malaysia has pioneered Signing Stores globally, which employ Deaf and hard of hearing partners, creating opportunities for underserved communities.
As a company, we are committed to becoming resource positive – to give more than we take from the planet. As part of that, we certified the first Greener Stores in Asia Pacific this April. Sixteen stores across Asia Pacific, in markets including Singapore, Thailand, and Vietnam have received the Greener Store certification.
Greener Stores reduce Starbucks environmental impact through performance-based standards that incorporate design and extend throughout the life of a store. Globally, Starbucks has a goal to certify 10,000 Greener Stores by 2025, helping us reach our 2030 goals of reducing carbon, water, and waste footprints by 50 percent.
RiA: Craft coffee is growing in popularity in Asia, which has its fair share of coffee-growing destinations. Does Starbucks plan to expand collaborations in this space?
Kan: As for coffee and craft, we are the only company in the region with a significant number of stores in coffee-growing communities, which allows us to spotlight locally grown, small-lot coffees across Starbucks Reserve bars.
We opened Starbucks first Farmer Support Center in Asia Pacific, in North Sumatra, Indonesia, in 2015, where our agronomists work closely with coffee farmers to encourage responsible growing practices.
Elsewhere in this vast, coffee-growing country, we have the Dewata Coffee Sanctuary in Bali. It is our largest destination in Southeast Asia, and pays tribute to the important role that Indonesia plays in bringing Starbucks customers the highest quality coffees. This one-of-a-kind store features an Arabica coffee-tree farm, coffee-seedling nursery and private tasting rooms.
RiA: Please share some of your key priorities for the region.
Kan: Partner (employee) development continues to be a key priority for me. Providing industry-leading benefits and professional development for our partners is a cornerstone of who we are as a company.
Our partners are at our core and I am incredibly proud of the passion and dedication of our partners in delivering the unique Starbucks experience to our customers every day – nurturing human connection. As we continue to grow, we remain committed to supporting our partners and their well-being with development programs that help them achieve their aspirations.
SEE ALSO: Inside Starbucks’ ‘Greener Stores’ in Southeast Asia
We want to create a culture where partners not only take pride in what they do at work every day but most importantly, I want partners to have fun while doing their work – creating a culture that focuses on delivering performance through the lens of humanity.