Alipay, the Alibaba-backed mobile payment tool, said that effective immediately, it can be used for payment in more than 2,800 Starbucks stores in the Chinese mainland, according to Alipay’s official Sina Weibo account. The payment tool was also extended to Starbucks stores in China’s Macao Special Administrative Region and Malaysia as well as at Japanese airports including Narita International Airport, Kansai International Airport and Naha Airport in Okinawa Prefecture, the company said…Full Article: The Global Times Sept 2017

Key Point

  • From January to March 2017, according to the CEO of Starbucks China, WeChat Pay (began in December 2016) accounted for 29% of all transactions. In terms of the entire mobile payment market within China, over the same time period, Alipay held a 53.7% share, while WeChat Pay had a 39.5% share. Apple Pay had a ~1% share.

ChinaAg Comments

  • From 2016 to 2021, Starbucks hopes to increase the number of its Chinese stores/cafes 2,300 from 5,000.
  • In December 2016, Starbucks permitted customers to make purchases with Tencent’s WeChat. In China, Costa Coffee, McDonald’s and Kentucky Fried Chicken have already adopted the WeChat digital payment system.
  • 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 July 2015, various KFC restaurants in Beijing, Shanghai, and Zhejiang began allowing customers to pay via Alibaba Group’s Alipay.com.
  • 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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