Starbucks aims to eventually apply the lessons it has learned in China’s fast-paced delivery industry to the United States, according to Kevin Johnson, the company’s president and chief executive.
Speaking to CNBC’s Eunice Yoon at the world’s largest Starbucks store, located in Shanghai, Johnson praised the pace of innovation in China — “faster than any other part of the world” — as he discussed the company’s recent partnership with Alibaba.
Aimed at expanding Starbucks delivery services to more Chinese cities, the alliance essentially integrates the Starbucks app into Alibaba’s digital networks. For customers, that means delivered Starbucks items mimic in-store quality thanks to re-engineered packaging and spill-proof lids, Johnson said.
When drinks are delivered and handed to customers, “the beverage is the same temperature as if the barista just prepared it and handed it to them,” he continued. The American businessman replaced former CEO Howard Schultz last year when the latter took on the role of executive chairman.
Going forward, the company is going to leverage the delivery practices it’s picked up in China and “apply them to other parts of the world, including the U.S.,” the CEO said.
The coffee giant told CNBC last year that it would open a new store in China every 15 hours. Since Starbucks first launched in China back in 1999, the nation has become the firm’s second-largest and fastest growing market. The U.S. brand already operates more than 3,000 stores and has said it expects to launch thousands more by 2021.
The ‘long game’
Regarding potential business disruptions from the ongoing U.S.-China trade war, Johnson struck an unconcerned note.
Given in how many markets the company operates, “there’s always something going on in geopolitical relationships,” so Starbucks has learned “to navigate those things,” he said.
“We’re not immune to the geopolitical situation, but we’re navigating it in a way that we think is authentic to us and reflects our long-term commitment to this market,” Johnson told CNBC.
So, he added, rather than reassessing its local investments, Starbucks will continue “playing the long game in China.”