Asia Business Channel

Starbucks targets Laos as its newest market

Starbucks plans to open an outlet in Vientiane, the capital of Laos as it expands its more than 10,000 stores in Asian countries / Photo courtesy of AP.

 

Starbucks announced today that it plans to expand its network of more than 10,000 stores in Asian countries with the opening of an outlet in Vientiane, Laos. According to the company, it plans to open the shop in the Laotian capital Vientiane by next summer.

Starbuck said in a statement that it intends to use its global scale to provide a positive impact and career opportunities in the impoverished, landlocked country that is bordered by Cambodia, China, Myanmar, Thailand and Vietnam.

Coffee Concepts (Laos) Ltd., a part of Hong Kong-based Maxim’s Caterers Ltd. will operate the new outlet. Michael Wu, Chairman and Managing Director, Maxim’s Caterers Limited said, “We are pleased to introduce the Starbucks brand into Laos, which further builds on our 20 year relationship with Starbucks to grow the coffee industry across Asia.”

Laotians are fond of drinking powdered coffee drinks that include milk and sugar, as is true across much of Asia, but the country of 7.2 million is a coffee exporter and has its own domestic coffee roasters and shops.

Retail analysts say that Starbucks will have a tough time in Laos and growing a sustainable business since local incomes average only $300 USD a month. They point out that based upon incomes, Starbucks will have to concentrate on a small domestic segment and an ongoing travel segment.

Before the global Covid-19 pandemic occurred this year, Laos was seeing an increase in international visitors, with more than 4 million people visiting the country in 2018.

Addressing the concerns that local people can’t afford a cup of Starbucks coffee, the company said in a statement that it intends to take a “locally relevant approach” for its customers, both tourists and Laotians.

Starbucks said in a press release that, “We will take a thoughtful approach to driving sustainable growth in Laos and look forward to contributing to the country’s vibrant coffee culture.”

Regarding the Covid-19 pandemic and the spread of the disease in Laos, Starbucks said it was monitoring the coronavirus situation but is still aiming at an opening in summer 2021. The company says that, “We will work closely with local health authorities, as we do in all markets, making decisions with the health of our partners and customers top of mind.”

 

 

 

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