Starbucks to Apply Lessons Learned in China to the US
According to Kevin Johnson Starbucks’ president and chief executive, the company is looking to eventually use the experience it has accumulated in China’s fast-paced delivery industry and apply it to the United States.
Speaking to CNBC at the world’s largest Starbucks store in Shanghai, Johnson praised the pace of innovation in China as being “faster than in any other part of the world”. The CEO also said that the company is going to leverage the delivery practices it’s picked up in China and “apply them to other parts of the world, including the U.S.,”.
We went inside the world’s largest Starbucks from CNBC
Since establishing a partnership with the Chinese Internet giant in August, the company has been delivering items to customers that mimic in-store quality thanks to re-engineered packaging and spill-proof lids.
The delivery service was well-received by Chinese consumers as it matched the nation’s preference of ordering takeout via popular apps such as Ele.me.
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After the testing out the service in Beijing and Shanghai, the company’s delivery service is now available across more than 1,000 stores in 17 cities in China. The company said it will provide the service to more than 2,000 stores in 30 cities by the end of this year.
Aside from cafes, orders can also be placed through “Star Kitchens” as well, which are located at Hema supermarkets.
Hema is Alibaba’s new retail grocery chain in China similar to Amazon Go in the U.S. but with additional features. Shoppers “scan and buy” groceries using Hema’s mobile app. They can also use the app to order for home delivery.
“This means that a customer that uses Alipay or Taobao, Tmall or Hema has an integrated Starbucks virtual store similar to the mobile app embedded right into that experience,” the CEO said. “That opens up 500 million or more active users of those apps that will have access to Starbucks.”
“We’re playing the long game,” Johnson said about the company’s investment in China.
The coffee giant told CNBC last year that it would open a new store in China every 15 hours.
Starbucks opened its first store in Beijing back in 1999. Since then, the number of Starbucks stores in China has reached over 3,000 locations through rapid expansion over the past two decades.