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Starbucks betting big on China - opens world's biggest cafe in Shanghai

Starbucks is opening its biggest outlet ever on Wednesday in Shanghai and the company is expecting huge crowds to experience the 30,000 square foot store. The "Starbucks Reserve Roastery" is on Nanjing Road West, the city's most famous shopping street and has been heavily promoted for months on social media. Starbucks has big ambitions in China and this puts the exclamation point on its intentions.

Here are some interesting facts about the world's biggest Starbucks location:

  • Starbucks’ Shanghai Roastery has three coffee experience bars, one of which is a whopping 88 feet long, the longest Starbucks coffee bar in the world. The bars allow customers to be up close and watch as their coffee is brewed.
  • More than 100 beverages will be available for purchase, including Teavana tea infused with nitrogen and a new steam tea brewing technique.
  • Like the location in Seattle, the Shanghai Roaster will feature menu items that cannot be found at any other Starbucks location.
  • The Roastery includes China’s first Teavana Bar.
  • Princi bakery, which is also featured in its Seattle location, will be manned by more than 30 skilled bakers and chefs and feature more than 80 items baked on-site daily.
  • There is so much hype about the store opening that there are fears among some users that it could take three hours to get serviced when it first opens.

Augmented reality

For those that visit Shanghai’s Roastery, Starbucks has included an augmented reality experience. Customers can use their smartphones to learn more about key features within the Roastery.

Diners need only point their phones at items within the Roastery to get more information about them and Starbucks’ history. The “tour guide” is powered by Alibaba. Customers in China can pay for Starbucks purchases using the mobile payment service from Alibaba-affiliate Alipay, which the roaster began accepting in September.

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Big plans for China

China has become Starbucks’ second-largest and fastest growing market. There are more than 3,000 Starbucks stores in China, with 600 in Shanghai alone, and Starbucks plans to increase that number to 5,000 by 2021. At this rate, the coffee giant estimates that a new store opens every 15 hours in China.

"It's obvious to us that the holding power of China for Starbucks is going to be much more significant than the holding power of the U.S.," founder Howard Schultz said Tuesday at a briefing to unveil the new cafe. China is on course to be the company's largest market in less than a decade, he added.

Starbucks' same store sales in China rose 8 percent in its last quarter, far outpacing its global 2 percent growth. Revenue from the Asia-Pacific region is almost 15 percent of Starbucks' revenue for the fiscal year ended in October - that's up from just 5.5 percent five years earlier. Clearly the company is excited for the enormous growth potential in China which has a long runway for expansion.

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About the Author: Chris Wang

Chris Wang

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