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Nearly a third of Starbucks China purchases through WeChat

News, 12 May 2017
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SHANGHAI: Since Starbucks announced a partnership with Chinese web giant Tencent, the coffee-shop chain has grown 7% in the last quarter, driven by a 6% increase in transactions through WeChat pay.

The figures were revealed by Starbucks China CEO, Belinda Wong, during an analysts briefing on the release of the brand's second quarter sales data, Inside Retail Asia reported.

"In its first quarter, WeChat Pay has already reached a remarkable 29 per cent of tender and has elevated the Starbucks Experience for both customers and partners through its convenience and fast transaction speed," said Wong.

In addition, the coffee maker saw growth in all categories and dayparts, Wong went on to say, adding that "targeted brand investments are attracting new customers into our stores and bringing existing customers in more often."

In February, responding to the increased demand on WeChat pay, Starbucks introduced a 'coffee-gifting feature' via WeChat. Gifting is already wildly popular in China, especially around Chinese New Year, where over 14bn red envelopes were shared on WeChat.

"In only the first seven weeks after launch, over 1.2 million gifts were sent and over half have been redeemed by recipients in our stores," Wong told analysts.

Not only is the gifting platform, Say it With Starbucks, a conduit for kindness, Wong observes, but an "opportunity to further build new and authentic customer connections.

"We're only in the very early stages of social gifting in China and the growth opportunity ahead is enormous," she continued.

Looking ahead, Starbucks is aiming to create new usage occasions in the country, with the launch of ready-to-drink beverages such as the Frappucino, which Wong says has tripled the brand's ready to drink business.

Meanwhile, commentators have observed the lure of WeChat's hongbao –red envelope– integration. Ad Age observed that by using clever gamification, the platform was able to attract users to its payment system, thereby linking their bank accounts to the app.

In December of last year, WeChat revealed in its data report, that it had 768 million daily logged in users, representing a year on year growth of 35%.

Data sourced from Inside Retail Asia, TechCrunch, Ad Age, WeChat; additional content by WARC staff

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