Starbucks China thrives with WeChat partnership

WeChat Pay now accounts for 29 per cent of all Starbucks transactions in China as the US coffee maker’s momentum in the market reaches record pace.

Belinda Wong, CEO of Starbucks China, revealed the figure during a recent analysts briefing following the release of the company’s second quarter sales data.

Starbucks China sales grew 7 per cent on a same-store basis in its latest quarter, driven by a 6 per cent increase in transactions.

“Partner and customer enthusiasm for the Starbucks brand and the momentum in Starbucks China business have never been greater,” Wong said. “We saw growth in all categories and dayparts. Beverage, food and digital innovation are laser-focused on operational excellence, and targeted brand investments are attracting new customers into our stores and bringing existing customers in more often.”

Starbucks China launched a strategic partnership with WeChat parent Tencent last December, including offering the popular WeChat Pay as a digital payment option in all of its stores. “In its first quarter, WeChat Pay has already reached a remarkable 29 per cent of tender and has elevated the Starbucks Experience for both customers and partners through its convenience and fast transaction speed,” said Wong.

“Following on that success, in February this year, we launched social gifting to unprecedented customer demand, partner excitement and social media interest. In only the first seven weeks after launch, over 1.2 million gifts were sent and over half have been redeemed by recipients in our stores.”

A gifting platform, Say it With Starbucks, not only encourages everyday simple acts of kindness and connection, it is also bringing new customers into Starbucks stores, said Wong.

“This is a great opportunity to further build new and authentic customer connections. We’re only in the very early stages of social gifting in China and the growth opportunity ahead is enormous.”

Starbucks China opened in five new cities in the second quarter taking its network to 2628 stores across 127 cities.

Now, the company is pursuing other areas of growth for the brand in what is already its second largest international market, and by far the fastest-growing.

“We’re creating new Starbucks occasions beyond our our retail stores. In the first quarter, we launched bottled Frappuccino, a new ready-to-drink beverage, tailor-made to local customer taste preferences, and it is already available through more than 30,000 points of distribution. Since launch, we’ve tripled our RTD business and added five points of market share compared to the second quarter last year. And we have many exciting new CPG products in the pipeline, including a delicious tea-based Frappuccino,” said Wong.

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