Starbucks Corp hired its first chief growth officer in China, tasked with luring back young coffee drinkers as the US chain struggles with cheaper local rivals in its biggest international market.
The executive, Tony Yang (楊振), has been on board since last month and would pursue a strategy of brokering tie-ins with entertainment franchises and pop culture icons to market itself to consumers, Starbucks China said yesterday.
The China product development, research and development, and marketing departments would all report to Yang, a former user development executive at Geely Holding Group Co (吉利控股集團)-backed electric vehicle maker Jiyue Auto (極越). His role would also focus on coffee product innovation and improving customer experience.
Photo: Bloomberg
China is “an important growth engine for the future,” the company said.
Starbucks was once seen as largely infallible in China, where flush consumers flocked to western brands high in prestige. However, it has struggled as the economy slows, with cash-strapped diners pulling back on pricier drinks in favor of cheaper local upstarts whose coffees can cost just one-third of a Starbucks cup.
Key rival Luckin Coffee Inc (瑞幸咖啡) surpassed the Seattle-based company in annual China sales for the first time last year, and Starbucks is exploring options for its mainland operations, including the possibility of selling a stake in the unit, Bloomberg has reported.
Yang’s pledge to collaborate with pop culture franchises shows how the company wants to tap brand power other than its own to salvage Chinese business, with comparable sales down 14 percent in the September quarter.
It also takes a page from the book used by Luckin, which has long made such partnerships a cornerstone of its marketing strategy. Luckin’s recent successes have seen a tie-in with popular video game Black Myth: Wukong (黑神話:悟空), and an alcohol-laced latte made with premium domestic liquor label Kweichow Moutai (貴州茅台) that boosted both sales and online hype.
Starbucks’ new CEO Brian Niccol previously said he would travel this month to China, where the company operates more than 7,600 stores, to better understand the local business and competition.
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