Starbucks will set up the first Italian food-featured cafe in China, highlighting Italian dishes and drinks, the company said Friday [15 February 2019]. The move came as part of the U.S. coffeehouse chain company’s efforts to carry out a “purpose-driven growth agenda to play the long game in China,” according to the company’s statement…Full Article: Xinhua Feb 2019

Key Point

  • Starbucks new Italian food and beverage café will open in Shanghai and will serve products from Princi bakery (originally established in 1986 in Milan, Italy). At the time, Starbucks had a total of 3,700 stores in China located across 158 cities.

ChinaAg Comments

  • In December 2018, Starbucks China announced that it would be working with Alibaba (i.e. Taobao, Tmall, and Alipay) to launch an online virtual store.
  • In October 2018, Starbucks China plans to expand its delivery service to various Hema (aka Freshippo) supermarkets (Alibaba owned) in Shanghai and Hangzhou, Zhejiang Province.
  • In September 2018, Starbucks China began delivery service (via Alibaba’s Eleme) in Beijing and Shanghai. Orders will be delivered with tamper-proof seals that, if disturbed, can be rejected by the customers.
  • In August 2018, Starbucks China announced it would form a partnership with Alibaba’s Eleme delivery service. The partnership, called “Starbucks Delivers”, was slated to be launched in Beijing and Shanghai the following month.
  • In July 2018, Starbucks reported that its China store sales decreased by -2% during its Q3 (third-quarter) fiscal year (ending in July 1, 2018). In November 2018, Starbucks reported that its Chinese store sales increased by 1% during its Q4 fiscal year (ending in September 30, 2018).
  • In 2017, according to Euromonitor, Starbucks had an 80.7% share of the coffee shop chain market in China. The next largest specialized coffee chains were McCafé (8.4%) and Costa Coffee (5.2%).
  • In December 2017, the Starbucks Roastery and Tasting Room (~30,000 sq. feet) was opened in Shanghai. The high-end store featured a Teavana (tea) bar, a Princi bakery, and an Alibaba-backed digital smartphone tour of the roastery. During the same month, Starbucks assumed 100% control of approximately 1,300 Starbucks outlets in the eastern Chinese provinces of Jiangsu and Zhejiang, as well as Shanghai (~600 outlets). The deal was initially announced in July 2017. As a result of its completion, Starbucks had more than 3,200 wholly-owned stores in China employing 40,000 people across 139 cities.
  • In July 2016, Starbucks announced that Princi food products, a boutique bakery, will be used to stock Starbucks’ new international roaster and reserve tasting room in Shanghai (opening in 2017).

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