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Starbucks China restructures management

Starbucks Corp. said it will restructure its management in China to create two divisions, retail and digital innovation, Sina Finance reported May 27.

The restructuring, effective June 1, will see Starbucks China CEO Belinda Wong elevated to the chairperson role while retaining her current position as chief executive.

COO Leo Tsoi will take on an additional role as president of the retail unit. Molly Liu, vice president of digital ventures, will be promoted to general manager of the digital innovation unit.

The announcement of the restructuring comes after Starbucks launched on May 22 its in-store pickup service in about 300 stores across Beijing and Shanghai.

Benjamin Cavender, principal of China Market Research Group, told S&P Global Market Intelligence that the restructuring and the launch of the in-app service showed that Starbucks was aware of the need to be more agile in the Chinese market following the rise of coffee chain Luckin Coffee Inc.

"Starbucks has generally been slow to initiate digital innovation in China and I think that was highlighted heavily by Luckin's aggressive growth through leveraging a digital-first strategy," said Cavender.

Cavender added that this structure, believed to be the first for the Seattle-based coffee chain, is naturally first implemented in China because the company has yet to face competition like Luckin Coffee elsewhere.

The newly listed coffee chain, which mainly operated on a mobile order and delivery model, first courted attention for its breakneck expansion and ambitious plan to overtake Starbucks in China. Interest in its stock has waned since the IPO, when its shares closed at $15.32 on May 24, below its $17 debut price.