* China will be 2nd home market for Starbucks after U.S.
* China profit contribution doubled this year -China head
* Coffee consumption becoming popular amongst Chinese youth
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By Melanie Lee and Helen Ding
SHANGHAI, Nov 25 (Reuters) - Starbucks Corp SBUX.O sees China as its next major market after the United States as a taste for coffee and robust consumer spending fuel sales in the world's most populous nation, its China chairman said on Wednesday.
Starbucks, which has 306 stores in mainland China, is bullish in its outlook for the predominantly tea-drinking country and views China as a very important market, whose profit contribution to the company more than doubled in 2009, said Wang Jinlong, chairman of Greater China for Starbucks.
“It’s absolutely very, very important. This has really become our second home market,” Wang told Reuters in an interview.
“I can’t tell you how long it’s going to take but it is already happening,” he added.
Contribution from international markets was about 21 percent of total net revenue in Starbucks’ fiscal fourth quarter and earlier this month, the Seattle-based company raised its financial forecasts for 2010, calling for 100 net new stores in the United States and around 200 net new international cafes.
Starbucks, the world’s largest coffee chain, was among the first high-profile U.S. businesses to show signs of stress when the economy weakened in late 2007, due in part to its aggressive expansion into areas where housing boomed and then busted.
The firm faced significant headwinds in 2008 as declining sales and the U.S. financial crisis forced the firm to book its first ever quarterly loss and shutter stores across the U.S.
“It is still a very U.S. centric company, but this economic downturn has really helped Starbucks turn a corner to focus on international (markets),” said Wang at an industry event.
Wang also said that coffee consumption in China may outstrip that of the other more established coffee-drinking countries, such as the United States.
“It’s only a matter of time as China continues to grow and develops in coffee consumption. It’s just going to be a huge, huge opportunity,” Wang said.
Starbucks Chief Executive Howard Schultz said earlier this month he saw the potential for thousands of stores in China.
The shift to drinking coffee is happening primarily amongst the youth, Wang said.
“Coffee represents change, it represents a new lifestyle for the young people, our core customers are all very young,” he said.
(Editing by Jacqueline Wong)
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