Belinda Wong, the Chairman of Starbucks China and former CEO, is set to retire. According to rumors, Wong will officially step down on January 24th. On January 17th, a source close to Starbucks China confirmed to Interface News that Wong’s retirement is true, though it remains an internal announcement for now.
Prior to this change, Starbucks China had already undergone some personnel adjustments. In September 2023, Starbucks China announced the appointment of Liu Wenjuan as the “Co-CEO of Starbucks China,” who would lead the China business alongside Wong, who was still CEO and Chairman at the time. A year later, Starbucks announced another leadership restructuring. From September 30, 2024, Wong stepped down as CEO of Starbucks China but continued to serve as Chairman. Liu Wenjuan took over as CEO.
Belinda Wong joined Starbucks in 2000. Before taking charge of Starbucks China’s overall business, she had served as General Manager of Starbucks Hong Kong and Managing Director of Starbucks Singapore, overseeing the company’s overall business strategy, brand development, and store operations in those regions.
A Pioneer in Popularizing Coffee Culture in China
Wong, who popularized coffee culture in China, leaves behind a legacy that will present new challenges for her successor. Wong served as President of Starbucks China from 2011, was promoted to CEO in 2016, and became Chairman in 2019. Prior to her tenure, Starbucks China had never had separate positions for “CEO” or “Chairman.”
During Wong’s leadership, Starbucks China experienced rapid growth. Under her guidance, China became Starbucks’ fastest-growing overseas market and the second-largest market globally. The number of Starbucks stores in China grew from over 400 in 2011 to more than 7,500 across over 900 county-level markets today.
Starbucks’ Q4 and full-year 2024 financial results show that in Q4, Starbucks China achieved net revenue of $783.7 million (about 5.595 billion yuan), a 6% sequential increase excluding foreign exchange impacts. For the full fiscal year 2024, Starbucks China’s net revenue reached $2.958 billion (about 21.109 billion yuan), with a double-digit operating profit margin.
Wong’s numerous innovations have driven Starbucks China’s success, including the emphasis on the “third place” concept in store formats, launching various “Reserve” store types that emphasize spatial design and coffee experience beyond regular Starbucks stores. These stores, suitable for working and business, attracted many consumers and made “third place” a representative card for Starbucks in China’s coffee industry. This idea originated from Wong and expanded from China to Starbucks’ global market.
In 2017, Starbucks China faced a key competitor, Luckin Coffee, which quickly became the second-largest coffee chain in China the following year. Luckin’s innovative delivery services and low-price strategy rapidly captured the market. This was perhaps the first time Starbucks felt such significant competitive pressure in China. In 2018, Starbucks China stepped up its digital and coffee delivery efforts. This timely change led to rapid growth in Starbucks China’s digital business. As of Q1 of the 2024 fiscal year, its digital business (including delivery and mobile ordering) accounted for 52% of total sales, a record high.
Brian Niccol, Starbucks’ current Global Chairman and CEO, highly praised Wong’s contributions in a statement to the media, saying that Wong turned China into Starbucks’ largest international market and made Starbucks one of the most respected and beloved brands in China. The Starbucks website also praised Wong highly: “In addition to the third place and digital innovation, she also expanded Starbucks’ scale, promoted community prosperity, cultivated coffee culture, and developed China’s specialty coffee industry.”
In fact, in 2021, Wong had stepped down from the CEO position of Starbucks China, which was taken over by then-Chief Operating Officer Cai Deqian. However, due to the impact of the pandemic and other factors, Starbucks’ performance was somewhat strained. Therefore, Wong returned to the CEO role just a year later. This is actually her second retirement. Looking at her two tenures in 2011 and 2022, Wong’s “missions” coincided with critical periods in Starbucks’ development in China, giving her a sense of being called upon in times of crisis.
Like Starbucks founder Howard Schultz, Wong is also skilled in public speaking and communication. During her tenure, she attended Starbucks’ internal partner conferences annually and gave keynote speeches, even pumping up Starbucks employees with fist-pumping enthusiasm. Especially after the COVID-19 pandemic hit the catering industry hard, at the internal partner conference in April 2023, she started by crying, “We made it!” Wong said that all employees had toughly navigated this special period. Within Starbucks, Wong used such events and public speeches to promote Starbucks’ corporate culture and boost morale.
However, the current competition in China’s coffee industry has become even more intense. After Wong’s departure, the new CEO needs to lead Starbucks China into a period different from the past high-speed growth.
A New Era for Starbucks China
Starbucks’ Q4 2024 financial report shows that despite a double-digit profit margin, same-store sales in China declined by 14%, with same-store transactions and average ticket prices falling by 6% and 8%, respectively. In Q4, Starbucks China added 290 new stores, entering 78 new county-level markets. By the end of the quarter, the total number of stores reached 7,596, covering nearly 1,000 county-level markets in China. Additionally, in 2024, based on its annual store expansion plan, Starbucks China added 790 new stores, a 12% increase year-over-year, setting a new record for the company in China.
Over the past year, Liu Wenjuan, who co-led Starbucks China with Wong, has also gained recognition from headquarters. In September last year, Brian Niccol said that under Liu’s leadership, Starbucks significantly improved store operations in China and increasingly emphasized digital innovation. Starbucks is at a turning point globally and in China, urgently seeking new leaders. At the global headquarters, Starbucks also made significant personnel adjustments. In August last year, then-CEO Laxman Narasimhan resigned from his position as CEO and board member, succeeded by Brian Niccol, who has more experience in catering and digitalization. Starbucks founder Howard Schultz said that Brian Niccol is the leader Starbucks needs in this critical historical period. This move was also well-received by investors, with the company’s stock price surging by its largest single-day increase since its IPO.
In the China market, Starbucks is also considering whether to bring in new partners. On November 21 last year, market rumors indicated that Starbucks was exploring various options for its China business, including the possibility of selling equity. Starbucks had informally assessed the interest of potential investors, including domestic Chinese private equity firms. Additionally, equity sales could also attract interest from Chinese enterprise groups or other local companies with experience in the industry. Starbucks China is still evaluating whether to make this choice.
Currently, Starbucks in China faces challenges such as price wars, weak consumption, and strong competitors. Over the past year, Starbucks China repeatedly emphasized its unwillingness to engage in price wars, but market competition has forced it to take measures to attract consumers, such as continuously issuing coupons online, making collaborations, upgrading membership systems, and even launching milk tea products.
In the future, achieving high-speed growth will be more difficult. Although the Matthew effect will further concentrate advantages towards experienced and scaled brands, Starbucks remains a highly influential coffee brand in China. However, changes in the environment also mean that Starbucks in China needs not only partners who can provide more local resources but also a strong leader who understands the market.
