Starbucks Opens Premium Reserve Roastery in China

A customer stands at the counter of a Starbucks Corp. store in the Shibuya district of Tokyo Japan on Thursday Nov. 16 2017. Japan’s economy grew for a seventh straight quarter its longest expansion since 2001 as a recovery in exports and rising

Starbucks now runs 3,000 stores in China, where it claims to be opening "a store every 15 hours".

A country known for guzzling tea has just become home to the world's largest Starbucks.

Starbucks has more than 600 coffee shops in Shanghai, more than any other city in the world.

"China is our second-largest and fastest-growing market".

The company's latest quarterly earnings were pretty gloomy, showing disappointing sales growth in a tough retail environment.

Starbucks is opening one store in China every 15 hours, the company's China CEO Belinda Wong told "Squawk Box". In the fiscal year 2017, Chinese sales grew by 7 percent, while global sales grew by 3 percent.

China is no longer a simple market for Western food and beverage brands, and chains from McDonald's to Pizza Hut have spruced up their offerings to seem more up-market and trendy as they pursue China's growing middle class on its upward trajectory. Most of those visits occur between 1 p.m. and 3 p.m., but he said the stores are starting to see more residents adopt the American habit of drinking coffee in the morning. "The point is to be in a highly, highly visible, touristy [area] where there's foot traffic, offices and urban housing in order to promote the brand".

Customers can use Alibaba's site to book coffee tasting experiences and buy special "Reserve" products. And if such a thing exists, the new Shanghai shop is probably it.

Starbucks is partnering with Alibaba Group, owner of the South China Morning Post, to create what it is calling its "immersive AR experience" for customers, run on Alibaba's Taobao shopping app, which allows, for instance, digital menus and ordering, insights into its brewing methods, and merchandising. As part of the Reserve Roastery's grand opening, The Starbucks Foundation and Starbucks China have announced their plan to donate $20 million USD (RMB 132 million) over the next five years to drive social impact in communities across China. The company has already inked a deal for an enormous 43,000-square-foot Reserve Roastery in Chicago that's set to open in 2019.