Starbucks to open first outlet in Yangon, taps Myanmar for growth in ASEAN

American coffee franchise Starbucks will soon open its first outlet in Yangon, Myanmar, leaving Laos the only market in ASEAN it has yet to penetrate.

On May 12, the Myanmar Investment Commission (MIC) endorsed Coffee Concepts Myanmar Ltd (CCM), a wholly foreign-owned food and beverage services provider. CCM is the operator of Starbucks in Myanmar, according to the MIC. CCM was registered with the Directorate of Investment and Company Administration in December 2017, a DICA document reveals.

The first-ever Starbucks in Myanmar will be located in Sule Square mall, Kyauktada township, Yangon.

The move arrives five years after the Seattle-headquartered coffee firm first set its sight on the Myanmar market as part of its plan to expand in Asia.

During a visit to Thailand in 2013, Howard Schultz, Starbucks CEO, said that Myanmar was one of his firm’s targeted countries for expansion and that he expected to open the first Starbucks “within the next couple of years.”

Rising competition

Starbucks will not be the first coffee franchise to have set foot in Myanmar though. Gloria Jean’s, an Australian coffeehouse chain, currently has four outlets in Myanmar, all located in Yangon.

In February, Singapore-listed Myanmar Investco (SMI) announced that it had secured an exclusive deal to set up and develop The Coffee Bean & Tea Leaf (CBTL) brand in Myanmar, with the first CBTL outlet opening under the deal scheduled for the first quarter of 2018. SMI already operates two outlets within Yangon International Airport.

Meanwhile, Tealand Myanmar (which formed part of the Taiwan-based franchise teahouse chain Chatime until last year), which opened its first store in Myanmar in 2013, had 14 outlets in Yangon and two in Mandalay as of August 2017.

However, Starbucks still beats UK-based Costa Coffee in setting up shop in Myanmar. Costa Coffee, the world’s second largest coffeehouse chain, is still not present here. Neither is London-based Caffè Nero or Illinois-headquartered McCafé.

Costa, a subsidiary of the London-listed Whitbread brewing and hotels group, has a presence in Singapore, Thailand, Cambodia and the Philippines, according to the company’s press release in September 2014. It sources its coffee beans from Vietnam.

Tapping ASEAN for growth

Following its opening in Myanmar, Starbucks now has a presence in all the member states in ASEAN, with the exception of Laos.

The world’s largest coffeehouse chain has been actively expanding its presence in Asia and particularly Southeast Asia. Beyond China, it launched its first store in India in 2012, followed by Vietnam, Brunei and Cambodia in the ensuing years, while looking to double its number of shops in Thailand to 320 by 2018. The coffee chain launched its first outlet in Phnom Penh in December 2015, and it has since opened ten more in the country.

As of October 1, 2017, the coffee chain has 1,540 company-operated shops in China, 1,218 in Japan and 312 in Thailand, according to its 2017 annual report. All 133 operated shops in Singapore were transferred to licensed ones as a result of the sale to Maxim’s Caterers Ltd in the last quarter of 2017. For licensed shops, there is currently a total of 4,409 outlets in Asia Pacific: 1,396 in China, 1,108 in Korea, 420 in Taiwan, 324 in the Philippines, 317 in Indonesia, 248 in Malaysia and 596 in the rest of the region.

As of end of 2017, the multinational has a combined total of 28,039 outlets globally, including both company-operated stores and licensed stores.

Source : Myanmar Times

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