WeChat lets users text friends, post selfies and pay a gas bill with a smartphone. From Thursday [8 December 2016], the blockbuster Chinese app, known as Weixin Pay in China, has also been used to buy a Java Chip Frappuccino. Starbucks Corp said on Thursday it will accept the payments system at about 2,500 of its cafes across China, enabling customers to complete purchases with a scan of their phone…Full Article: ECNS.cn Dec 2016

Key Point

  • In China, Costa Coffee, McDonald’s and Kentucky Fried Chicken have already adopted the WeChat digital payment system.

ChinaAg Comments

  • From 2016 to 2021, Starbucks hopes to increase the number of its Chinese stores/cafes 2,300 from 5,000.
  • In February 2016, COFCO Group launched COFCO Healthy Life on Tencent’s WeChat. The online store focuses on selling nutritional and dietary supplements. COFCO was incentivizing users to purchase products on COFCO Healthy Life by giving them with “cash back” rewards.
  • As of early 2016, China’s electronic payment market was dominated by Alibaba Group’s Alipay and Tencent’s WeChat Wallet.
  • In 2015, China had 770,000 public complaints pertaining to food and medicine (a 37% increase from 2014). Approximately 50% of the food and medicine violations in China were discovered via “public tip-offs.” The majority of the complaints stemmed from companies selling their products online from Tencent’s WeChat and other mobile phone applications. Complaints included operating without a license, substandard products, fake products, false advertising, and poor product labeling.
  • In June 2015, Yum Brands’ Kentucky Fried Chicken filed lawsuits in Shanghai against a Shenzhen company and two companies based in in Shanxi province over the spreading of rumors via Tencent’s WeChat. One rumor stated that KFC farms were raising genetically modified chicken.
  • In March 2014, Tencent Holdings (internet and tech investment company) purchased a 15% stake in JD.com.
  • Founded in 1998 and headquartered in Shenzhen, Guangdong Province, Tencent Holdings (HKG:0700) is an internet focused service company whose digital product line includes QQ (instant messaging service), WeChat (Weixin instant messaging service), and other web-based services such as video games, microblogs, search engines, web browsers, and e-commerce. In June 2004, Tencent Holdings was listed on the Hong Kong Stock Exchange.
  • In 1999, Starbucks opened its first coffee store in China.

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