China in-store News
Starbucks brews to flow through Meituan
Starbucks China has added a new delivery platform to its bouquet of services in China, in the form of a presence on Meituan, an e-commerce and delivery mobile app.
This additional channel, Starbucks said, will enable its customers to better connect with the brand and its services offered through local stores, besides enriching individual experiences.
Starbucks services are already available online through WeChat mini program, mobile app and Ele.me, a food delivery and online shopping app.
Now, through Meituan, Starbucks will offer private bookings for coffee experiences at select stores.
More than 60 Starbucks quick service restaurants－QSRs－in Beijing, Shanghai, Shenzhen, Guangdong province, and Chengdu, Sichuan province, now offer this service. Starbucks said it has plans to expand this service across the market.
In addition, the company has expanded its Starbucks Delivers program, a mobile order and delivery service, with more order customization features.
Another new service offers customers access to Starbucks Delivers on Meituan, where Starbucks Rewards members can enjoy the same benefits they receive on Starbucks China mobile app.
Beverage customization online allows consumers to more closely replicate in-store orders. This technology automatically reallocates orders to another store if a product is sold out at one store but available at a nearby store. This marks the extension of the Starbucks Reserve service to the online delivery space in China, the company said.
By the end of this year, each of Starbucks 5,000 directly operated QSRs in China will have a unique page on Meituan, where customers can access Starbucks Delivers and Starbucks Now services to order food and beverages.
Since the outbreak of the COVID-19 pandemic, the share of the delivery business in Starbucks China's revenue has increased. According to its financial report to the end of October, mobile ordering services, including takeout and delivery, have accounted for 36 percent of total sales in China, much higher than 26 percent recorded in 2020 and more than twice the pre-pandemic level.
Since 2018, Starbucks has worked with Alibaba's delivery platform Ele.me exclusively for its Starbucks Delivers services. The collaboration has developed spill-proof lids and tamper-proof packaging seals and delivery containers. Further, Starbucks has set up Star Kitchens in Hema Fresh, the retail unit of Alibaba.
China is Starbucks' single largest market outside the United States. The company has plans to expand itself into a 6,000-store chain spanning 230 cities on the mainland by the end of this year.
Li Chen, a food and drink analyst with Mintel Group, a London-based market research provider, said Starbucks' recent efforts in China reflect the awareness of fast rising competition from domestic brands.
"Chinese consumers used to associate lifestyle and quality with major foreign brands. Now they are reevaluating them and checking if such brands respect the local market amid guochao, or the rise of homegrown brands, and growing consumer confidence in domestic brands," said Li.
In China, coffeehouses have sought to improve the quality of their products and services constantly, especially in terms of local innovations, given their cultivated understanding of local consumers and culture, Li said.
By opening small stores to reduce costs, by tapping delivery services and by offering flavor customization, domestic coffee chains have attracted younger consumers, she said.