Starbucks to Replicate US Strategy Successes in China

on June 26 2014 | in Dining Trends | by | with No Comments

beijing, Starbucks, success in China, business model, Chinese customers, mobile payment,

Starbucks has begun to see more widespread success in China by replicating one of their highly proven business models. By opening stores in close proximity to each other—a strategy the brand uses often in American neighborhoods— the company has managed to attract more business than usual.

Similar to most areas of New York City or Los Angeles, one neighborhood in Beijing is home to two Starbucks that sit only 500 meters apart. Both stores have their fair share of customers though. One is located in the ground floor of an office building, catering to a business-minded crowd, while the other attracts a younger, trendier bunch.

Putting their long used strategy into action, CEO Howard Schultz said that the company opened 206 new outlets and 111 franchise stores in China just last year. The numbers revealed that the confident move was also a smart one as revenue in their China and Asia Pacific market increased by 27.1 percent to $917 million, according to Want China Times.

While the focus initially remained on opening flagship stores in larger cities like Beijing, Shanghai and Guangzhou, John Culver, the president of Starbucks China & Asia Pacific said that the company has decided to expand into second-tier cities and suburbs as well.

Starbucks is working on nurturing its new relationship with locals by taking part in neighborhood projects and arranging community volunteer activities. Culver hopes that getting to know the communities will help the company to market more effectively.

Another goal Starbucks is introducing social media and mobile payments to Chinese customers. The company’s 7,000 locations in the US currently process payments through Starbucks cards and mobile apps. The coffeehouse is  looking to further promote cashless transactions in China due to the fact that some $3.7 billion worth of store cards are held by global customers.



image credit: picturewendy

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