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What happened behind Starbucks's move from Tencent to Ali?

via:博客园     time:2018/8/8 11:53:50     readed:345


A report on the tiger's olfactory East China

Author Fan Xiangdong edited Li Qingle

Last week, Starbucks and Alibaba announced a strategic partnership, hungry to deliver food to Starbucks, box horses to Starbucks to make

In response to

Many Chinese consumers are pleased with the opening of Starbucks's takeout. In fact, in 2015, Starbucks opened its coffee in the United States, but it was slow in China. Now that Starbucks's attitude is reversed, what's happening here?

Starbucks's middle age crisis

Ma Yun once said that there are only two enterprises in the world that are most admired by themselves: one is Starbucks, the other is UNIQLO. Ma Yun and Schultz had known each other in 2009, and they also gave Schultz platform to attend the Starbucks global annual conference. But even with this relationship, Starbucks chose Tencent before Ali.

Tencent and Starbucks reached a strategic partnership on November 28, 2016 to explore the mobile payment and social digital consumer experience. Tencent is said to have been in talks for up to eight months before finally giving Starbucks stores access to WeChat Pay. Coffee itself has social attributes,

Until last August, Schultz came to the box horse fresh, and Hou Yi himself took a tour of the box shop and supply chain system. Subsequently, Starbucks and WeChat expired the exclusive agreement, in September 25th Starbucks fully access to the Alipay payment. Compared with WeChat, Alipay was 11 months late.

Starbucks is still the same.

The turning point should be at the beginning of this year. In January, Starbucks issued 2018 first quarter earnings as of December 31st, its same store sales increased by 2% year-on-year, lower than market expectations, and the worst year of Starbucks since the financial crisis since 2017, Starbucks shares fell nearly 5% in the same day. Fortunately, the Chinese market had nearly 30% revenue growth in the first quarter and 6% of the same store sales growth in the first quarter, which was compared with the same period last year. It helped Starbucks to hand over a satisfactory answer.


But Wall Street has broken glasses. In June, Starbucks issued a statement saying that the global growth rate of the same store fell from 3% to 1% in the third quarter, and it is expected that in the three months of June, China's sales of the same store will not grow. The price of a coffee culture in China has stagnated in its sprouting market, causing investors to question the sustainability of Starbucks's business growth, and the stock price has plummeted again.


Starbucks passenger growth declines year by year. Photo source: Bloomberg

In fact, in the past few years, Starbucks has closed 50 stores in the US market annually. Although Starbucks's gross profit is around 60% and the third quarter net interest rate is 16.8%, market research agency Zacks points out that the US market growth rate of 70% of astrologer's revenue has fallen year after year, and Starbucks's profit rate has been lower than the industry average for several years.

In July 27th, Starbucks released its third quarter financial report in fiscal year 2018. The results showed that Starbucks'global net revenue for the quarter reached $6.3 billion, with global sales growing 11%, but same-store sales grew only 1%. Starbucks's operating profit margin in China / Asia Pacific has dropped from 26.6% to 19%, down to 7.6%. Meanwhile, the same store sales in China's stores decreased by 2% compared to the same period last year.

Old stores don't grow in revenue and have to open new stores to boost sales, which means the 47-year-old Starbucks' main business is starting to move in.

Hand in hand Ali radiant youth?

The growth of the local market has peaked, and Starbucks, which has entered a midlife crisis, cannot lose the Chinese market, plus the face of it

Last September, Schultz went to the Hangzhou Ali base camp and had a deep meeting with ALI CEO Zhang Yong. The following two sides discussed it many times and finally reached the current way of cooperation.

  • Online entrance, members get through

On Aug. 2, Starbucks and Alibaba will join forces to open new online stores of Starbucks' retail intelligence. Consumers can access Starbucks online stores and enjoy the digital experience through any of the entry points, such as hungry, box horses, Taobao, Alipay, word of mouth, and Starbucks own applications. In the future, these portals will also be connected to the Starbucks Starboard Club membership system, which will eventually be implemented.

  • Is it hungry to customize the distribution

Starting in September, Starbucks will be starving in Beijing and Shanghai to pilot the service, hungry will be hungry to upgrade the distribution system for Starbucks, equipped with exclusive team, and based on the features of the takeout anti sprinkling equipment.

  • Starbucks in a box of horses

Starbucks will also cooperate with the box horse

This may be the biggest transformation since Starbucks's entry into China. Starbucks has finally opened its membership to Ali, and has signed a long-term strategic partnership for 3 years. Starbucks even turned its core coffee business into a box horse service. These open performances are aimed at continuing to tell the story of the Chinese market.

From the present details of the cooperation, Starbucks expects to use Ali new retail to get online traffic, and the ability to take out, to expand new users and to gain incremental sales, and to improve the stickiness of members through the precise marketing of the members Ali is good at.


Hungry CEO Wang Lei, tiger sniffing

At the launch, CEO Wang Lei said that Ali's cooperation with Starbucks would be transformed from the coffee supply chain, manufacturing, distribution, marketing and other processes, but the more mature direction of cooperation between the two sides is 2C. In an interview after the meeting, Hu asked Xu Hong, vice president of Alibaba Group, about innovation in the upstream supply chain and manufacturing chain of coffee, he said.


Without financial investment, why is Ali so

First of all, from the beginning of this year, you are hungry to fall behind the United States group. In the first half of this year, the US group trading volume accounted for 59%, hungry and 36%. In order to catch up with the opponents, we are hungry for $30 billion to subsidize users and marketing this summer.

For coffee consumers, coffee is high frequency demand goods. Starbucks has a group of loyal fans who will bring more stable traffic on the hungry line, which will help hungry to expand the market.

Next, Starbucks China more than 7 million member data and Ali call. In China, consumers who can normally consume Starbucks are undoubtedly

There should be a lot of overlap between the box horse and the Starbucks consumer. The takeout of the box horse aims at the white-collar group. The coffee is often a regular drink for the office workers, and the Starbucks is incorporated into the box horse, which allows the box horse to penetrate the Starbucks's consumers.

More importantly, Ali the full amount of resources input, a sample show the intention of muscle. Ali can use Starbucks as a new retail benchmarking case for Ka brands and serve as a model for market expansion. Starbucks also said

Why did you switch to Ali?

Starbucks began offering takeout services in the United States as early as 2015. In China, Starbucks has been slow to launch takeout services. Tiger sniff

Guess, Starbucks wants users to go to the store, experience and get used to coffee, make Starbucks a user's

What's the matter with Starbucks? What caused the reversal of Starbucks's attitude?

  • Loss of coffee diversification

Starbucks had two tea brands before, but it didn't go well. In July 2017, Starbucks closed more than 300 Teavana stores with poor sales, and now it is mainly sold in Starbucks's stores. In November 2017, Starbucks sold its tea brand TAZO to Unilever at a price of 384 million US dollars.

In May 7, 2018, Starbucks announced the sale of Starbucks's permanent rights (including marketing, production and distribution) to Nestle for sales of retail and catering products outside the global coffee shop, including marketing, production and distribution. Through this deal, Starbucks turned Nestle from a competitor into a strategic alliance.

But the divestiture of these businesses also means that the catering chain has become the absolute main business of Starbucks, and the decline in growth rate has a greater impact on investor confidence.

  • Internet coffee

Internet coffee has intensified competition in China's coffee market on the premise that competition between Starbucks and other brands of coffee such as Shangdao and Costa is still fierce.

Even coffee, Ruixing coffee led by the Internet coffee, with the Internet to seize the market. Has become

On Aug. 1, Ruisheng announced a further foray into the light food market, with a 50 percent discount on all light food at all stores across the country from now until the end of the year. This is for Starbucks.

In fact, Starbucks' positioning is consistent with fast food such as McDonald's and KFC, Boxing wrote in May of this year.

If Starbucks's positioning is returned to the essence of fast food, convenience stores, desserts and takeout are all alternatives to Starbucks. Not only is takeout, but office cafeteria is also catering to the domestic coffee market.

And Starbucks China has built up the essence of fast elimination.


Starbucks China CEO Wang Jingying, tiger sniffing

  • The social stickiness of the third space


China's consumption habits are different from that in the United States. In China, the proportion of the dining hall is higher, and the Starbucks Chinese stores are relatively larger, and the cost of the property is higher.

The location of the Starbucks store is an obvious fast food style, which opens stores in dense crowded places. The average income of China is lower than that of the United States. In order to cover the cost, Starbucks has a higher price in China than the United States. If fast food is not fast enough, the store will begin to drag on its performance.

If Starbucks continues to be single, it can wait for the market to mature, but China's developed takeout industry has changed people's living habits, looking for goods from people to commodities, which also reduces the attractiveness of Starbucks space.

Starbucks's publicity plan is to reach 6000 in mainland China by 2022, and it is certain that Starbucks is increasingly dependent on the explosive growth of China's business in response to a lack of sales growth in the United States and elsewhere.

The cooperation did not mention the transformation of Starbucks's offline stores, which means Starbucks did not give up.

WeChat public number: high street high reference (ID:gjgc168)

Convergence of new retail, new consumption, traditional retail companies transformation and upgrading of the actual combat cases and experience.

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