China has surpassed U.S.as Starbucks' fastest growing market and also the second largest with opening one store in China every 15 hours. Partnering with Alibaba's e-commerce sites Taobao and Tmall, Starbucks' Shanghai Roastery uses a digital menu with visualizations of the coffee-brewing process, and company stories in a mobile app that offers customers a video-game-like experience as they walk around the store with smartphones.
This new Shanghai store is almost 30,000 square feet, has over 100 beverages on the menu, and allows customers to participate in the first AR (augmented reality) experience from Starbucks.
Starbucks is now building more net new company-operated stores in China than the US, said CEO Kevin Johnson, who replaced CEO Howard Schultz in April when the longtime leader transitioned into the role of executive chairman. (SBUX) said it will open its biggest location ever on Wednesday in the Chinese city of Shanghai.
"One, you must be focused on experiential retail that creates an experience in your store that becomes a destination for the customer", Johnson explained when asked about what physical retailers must consider in 2017.
The Roastery is a window into Starbucks' future as the coffee chain attempts to bolster its premium image. "We have over 600 stores in Shanghai", Schultz said.
The Roastery will have 400 employees who can serve up to 550 people at a time, the company claims.
It would be all too easy to dismiss China's new Starbucks Roastery as a novel publicity stunt.
Starbucks' new Shanghai store is 30,000 square feet.
Starbucks Shanghai Reserve Roastery is now open at 789 Nanjing Road W.in Shanghai, China. The location has gourmet drinks - like nitrogen-infused teas - and an 88-foot-long, hand-crafted coffee bar.
Unlike in the US, Starbucks' challenge in China has been winning over traditional tea drinkers to coffee, rather than fending off local rivals. Same-store sales gained 8 percent in the country during the most recent quarter, compared with 2 percent globally.
Starbucks opened its first store in China in 1999 in Beijing.