Starbucks Looks To Solidify Its Position in China

Starbucks announces a deal with China’s largest food delivery service as it looks to expand its operations even further within the country.

Jan. 18, 2022

Some brands become so all-encompassing that their names begin to eclipse their actual product. When we think of online search, most of us picture Google. If we imagine soaking in a hot tub, Jacuzzi comes to mind.

And if I mention grabbing a coffee, I bet quite a lot of you will think about Starbucks (NASDAQ: SBUX).

So, how can Starbucks grow any bigger?

Quite simply, you double down on one of your largest markets – China. Starbucks has 5,360 stores in over 200 Chinese cities according to its last earnings report. These stores account for more than 15% of the company’s total global portfolio, making it the firm’s second-largest market after the United States.

While the company has a lofty goal of having 6,000 stores in China this year, it hasn’t rested on its laurels when it comes to alternative ways to generate revenue. Yesterday, Starbucks announced a partnership with the country’s largest food delivery firm, Meituan. The deal will allow Meituan’s customers to order coffee for delivery or to make in-store reservations using its ‘super-app.’

Starbucks, already boasting a similar partnership with Meituan’s main rival Alibaba, will now have direct access to 668 million paying customers utilizing Meituan’s platforms. This will give it a considerable advantage over native rivals such as Luckin Coffee and Hey Tea, along with other foreign companies such as Lavazza who have made significant in-roads into the region following a partnership with restaurant chain Yum China.

Starbucks isn’t showing any signs of stopping in its relentless pursuit of ubiquity. We can joke about seeing a store on virtually every corner, but that’s exactly how the brand has become so synonymous with our everyday brew. With the company continuing to expand over 50 years since its foundation, we have to wonder if it’s ever going to be caught.