In 2016, Starbucks appointed Belinda Wong as its top executive in China. Today, the company faces headwinds on a number of fronts in the region and had to report that they missed targets in April of this year, which perhaps explains why Seattle decided to change its leadership.
Tsoi has a proven track record at the company and appears a great candidate to lead the China business as it faces a market that is showing slower growth than expected as well as increasing competition.
However, I think Belinda Wong deserves some recognition for her accomplishments.
In order to better understand the challenges Ms Wong faced, it is important to put them in context. Because Chinese people traditionally drink tea rather than coffee, there was no fertile ground for her company’s expansion when she started the business.
At the time, young Chinese looked to the West for inspiration on fashion and trends, and she certainly was able to benefit from that, but even here, there was a need for brand translation. Starbucks must maintain a consistent brand image, but with a Chinese twist that could make it more appealing to local consumers.
Around 2016 or 2017, I visited my first Starbucks in Guangzhou and noticed the cakes were stale, despite the coffee tasting the same. During that time, we were informed that everything was imported from the United States, so nothing was fresh. Although I’m not sure if this is true, I’m sure there were many issues around logistics, marketing, branding and operations that needed to be resolved. In spite of these difficulties, Starbucks quickly became a staple for the coffee nations’ nascent coffee consumers.
She helped Starbucks open 2,000 stores for their first attack on the chaotic market when they were launching their assault over two decades ago.
In 2017, the company expected Ms Wong to double the number of stores from 2,500 to 5,000 by 2021. On average, that’s 500 new shops a year, or one and a half shops per day. Leo Tsoi, the new CEO, is credited with running the operation, but it actually took place under Ms Wong’s watch.
It would be unfair to discount the importance of Mr Tsoi’s role in Starbucks’ success in China over the last several years, but I think it’s important to recognize Ms Wong’s contributions.
There are currently 5,200 store locations in over 200 cities in China, which is less than a third of the fourteen thousand stores in the US. But the US grew its store count from a much longer period of time.
What I really admire about Ms Wong is that she achieved all of this while maintaining her work/life balance and promoting personal development in the organisation. She spends time with her family and works for good causes including rescuing dogs.
She pushed for housing subsidies for full-time baristas, created a Starbucks China University program, and pushed for family-friendly policies. China’s most famous businessman, Jack Ma, who pushed for a 996 work ethic (He thought employees should work from 9 am to 9 pm, 6 days a week), is exactly the opposite of this.
In addition to wishing Leo Tsoi well in his new role, we hope Ms Wong, who will remain Chairman and oversee the company’s long-term strategy, continues to be a strong positive influence within the company.
Official Press Release
Company elevates ‘homegrown talent’ to top ranks, including promotion of Molly Liu to the chief operating officer
Starbucks strengthens commitment to China as Belinda Wong, chairman of Starbucks China, focuses on long-term growth strategy, innovation and social impact in the market
SHANGHAI – Starbucks Coffee Company (NASDAQ: SBUX) today announced the promotion of Leo Tsoi to chief executive officer of Starbucks China. Serving as Starbucks China’s chief operating officer and president of Starbucks Retail for the last five years, Tsoi has led efforts to grow Starbucks footprint across the Chinese mainland to 5,200 stores across more than 200 cities today. He has engineered the development of a robust and diversified store portfolio by pioneering new store concepts, which have influenced new coffee-inspired lifestyles and further elevated third place experiences for Starbucks customers in China.
As one of the leading architects behind Starbucks China’s phenomenal growth since he rejoined the company in 2012, Tsoi previously served in various leadership positions, including vice president of North China region, chief marketing officer, and vice president of Store Development and Design, making many important contributions to strengthening Starbucks coffee leadership and elevating the Starbucks Experience.
“Leo has relentlessly pushed the envelope on innovation in China where customer loyalty and love for the Starbucks brand is unmatched,” said Kevin Johnson, president and ceo, Starbucks Coffee Company. “Our strong growth in China is a testimony to our deep bench of talented leaders and their relentless pursuit of further elevating the Starbucks Experience for our customers. I have great confidence in Leo’s ability to continue building the relationships we have with our Chinese customers through our rapidly growing store footprint, market-leading digital ecosystem and customer engagement, and robust innovation pipeline.”
With Tsoi’s promotion, Molly Liu is being elevated to chief operating officer of Starbucks China. Liu is a nine-year partner (employee) responsible for leading the development of Starbucks China’s Digital Ventures business, a leading growth engine for the company. As vice president and general manager of Digital Ventures, Liu has set the foundation for Starbucks China digital flywheel through pursuing relentless innovation and building landmark digital partnerships. Under her leadership, the Digital Ventures team has continuously up-leveled the Starbucks Rewards program while launching innovative and unique digital experiences including Starbucks Delivers (MOD), Starbucks Now (MOP), and Delivery Social Gifting, among others.
With these promotions, Belinda Wong will continue to serve as chairman of Starbucks China, focusing her attention toward delivering a holistic, long term strategy for Starbucks in the market, driving innovation through Starbucks Siren Ventures in China and other partnership opportunities, as well as elevating social impact in local communities through the Beijing Starbucks Foundation.
“Starbucks success in China today would not have been possible without Belinda’s visionary leadership over the past decade, leading the company to achieve unprecedented growth and transformation with her courage, steely determination, and deep passion for Starbucks and our partners,” said Johnson. “I look forward to continue working with Belinda as she focuses on long term strategy, innovation and leading engagement with key public and private sector stakeholders to unlock transformative opportunities for our business in this critical market.”