While Starbucks is already a well-established brand in the United States, the coffee chain has yet to make its brand into the mainstream consciousness of one of the world's biggest market, China. With this in mind, Starbucks is betting its future into China.
Just to get a rough glimpse of Starbucks massive expansion drive in China, the company is putting up a new store every 15 hours. Starbucks President and Chief Executive Officer Kevin John said that accelerating the company's growth in China is one of its "three strategic priorities."
It is also important to note that Starbucks' venture in China was done through various partnerships with local companies. Chief of which is the coffee maker's joint venture with tech giants Alibaba and Tencent.
In China, more than 60 percent of all of Starbucks' tender is paid through digital payment platforms using the company's mobile application. In comparison, mobile and digital payments in Starbucks' operation in the United States only accounts for 40 percent of its overall tender.
Mr. Johnson describes its venture with various mobile payment platform as one of the "transformative elements" of not only Starbucks but of the whole modern retail industry.
Despite the massive use of mobile and digital payment platforms, Starbucks said that the company has no intention of establishing its own payment system. The company said that it wants to focus on its core business, and instead rely on its partners to provide the necessary platform that will cover its mobile and digital payment arm.
In terms of ventures, the paid $1 billion last year in order to unify all of its operations in China. As of this writing, the company has more than 3,500 stores. Starbucks believes that by growing its core business in parallel with the Chinese culture is part of what makes its growth in the country highly positive. It is important to note that China is predominantly a tea-drinking culture.
Regarding the effects of the ongoing trade war between China and the United States, Mr. Johnson said that the company was able to mitigate the negative effects of it thanks to consumer confidence in the country.
With regards to the company's expansion, Mr. Johnson said that the company plans to build 600 new Starbucks stores in the country every year. This is the company's commitment within the next five years. When asked about the company's strategy in the country, Mr. Johnson simply said that the company is more leaned towards the long-term goal and is willing to play the long game.
