1.5 billion yuan! Starbucks spends a lot of money on digital layout!

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Starbucks announced the establishment of the China Innovation and Technology Center (Starbucks China Innovation and Technology Center) in Shenzhen, which plans to start operation in September, with a first investment of about 1.5 billion yuan ($220 million) in the next three years, according to Interface News.

It is understood that the purpose of creating SITC is to enhance its own technical capabilities and data infrastructure, and to further drive the digitization process of stores and multi-channels. As for why he chose Shenzhen, Wang Jingying, Chairman and CEO of Starbucks China, said: "Shenzhen is not only a hot land for digital innovation in China, but also a leading demonstration area for the development of the Greater Bay area. We can join hands with like-minded local scientific and technological talents and entrepreneurs to unlock the infinite possibilities of human ties through science and technology. " Generally speaking, Shenzhen is attracted to Starbucks because of its superior geographical location and all kinds of technical talents. As a world-renowned coffee chain, Starbucks entered the Chinese market in 1999. In 2002, the first Starbucks in South China settled in Citic City Plaza in Shenzhen.

So how exactly will SITC, created by this big investment, "assist" Starbucks' business in China? It is reported that SITC will make an initial investment of about 1.5 billion yuan ($220 million) in the next three years, initially recruiting hundreds of outstanding scientific and technological talents, providing a development platform for innovation and redefining the retail landscape and customer experience. Starbucks said it would use its leading position in retail and coffee, coupled with a strong supply chain and digital infrastructure, to provide fertile ground for large-scale incubation and commercialization of innovation. Specifically, SITC focuses on the following five key areas: customers, partners, coffee, efficiency and sustainability. In fact, it is much more than that, it is understood that this autumn, after the official operation of SITC, Starbucks China Coffee Innovation Industry Park in Kunshan will also open. This is another major investment of Starbucks in China, with a total investment of about 1.1 billion yuan, which can realize its complete supply chain from coffee planting to production and distribution in the Chinese market, and complete the local coverage of the whole coffee industry chain.

The equipment upgrade led by the giant has made the evolution and competition of the domestic coffee market more interesting. After entering the post-epidemic era, coffee prices continue to roll low, whether it is minority coffee shops, chain coffee shops. Are trying to challenge Starbucks. In the latest quarter's results, Ruixing surpassed Starbucks China with low-price misplaced competition and high-speed expansion model, a remarkable achievement for a brand that has stood out in the coffee market in just a few years. But around the world, Starbucks has 32000 stores in 82 markets around the world. Fortunately, it has just stepped out of the country and arrived in Singapore, its first stop in the overseas market. In addition, Starbucks is still a symbol of high-end coffee in China so far, and most shopping malls attract investment on their own initiative, so Starbucks can get gold shops and rent concessions in most cities. these are beyond the reach of other coffee brands.

Starbucks made such a large investment to enhance its competitive edge. Judging from the online trend, the proportion of transactions on digital platforms will become higher and higher. Starbucks China's digital business (including dedicated star delivery service, Kaidi mobile phone ordering service) has accounted for about 47% of revenue from more than 26% at the end of the fourth quarter of 2020. After the formal operation of SITC and Coffee Innovation Industry Park, there will be online quality products, stable supply chain and digital technology structure. It will be a key weapon for coffee brands to be more competitive.

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