TECHNOLOGY

Starbucks expanding in big way in Japan

BY Deena M. Amato-McCoy

Starbucks Corp. is targeting Japan for growth, both physically and digitally.

The coffee giant said Thursday that it will build 100 new stores in Japan each year for the next three years. The new locations will bring the number of Starbucks stores in the country to 1,700.

Starbucks also announced it is teaming up with Uber Eats Japan to launch a food and beverage delivery service in Tokyo. The pilot program will begin on Nov. 9 in six stores, three locations in Tokyo, two in Shinjuku and one in Roppongi, with plans to scale the program within the next two years.

In addition, the company is partnering with Line, Japan’s leading social platform in a deal that will enable the coffee company to innovate across various technologies, including digital payment. The first phase will launch in the first half of 2019, and connect Starbucks to Line’s more than 78 million users across Japan.

In addition, Starbucks Japan will also begin piloting a mobile order and pay program in 2019, enabling customers to order and pay from their mobile device, and pick-up in store, skipping the line. The service will be available through Starbucks’ mobile Starbucks Rewards loyalty program. Since launching the program in September 2017, digital transactions and cashless payments now represent more than 25% of all customer transactions at Starbucks, according to the company.

The new initiatives coincide with Starbucks expansion across its Asia-Pacific markets. For example, the coffee giant now offers delivery service in more than 1,100 stores in 17 Chinese cities, with full-service coverage in Beijing and Shanghai. The program, called Starbucks Delivers, originally launched in 150 stores in Beijing and Shanghai in September.

In May, the coffee giant also announced plans to build 3,000 stores — 600 net new stores annually — during the next five years in Mainland China, which will double the market’s store count from its current 3,300 locations. Starbucks said it expects to more than triple revenue and more than double operating income in China by the end of fiscal year 2022 from fiscal year 2017.

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