As mentioned in Week 9’s online lecture, WeChat is known by more and more people as a leading social media platform in China.
In recent years, WeChat has developed in such a fast pace and become more and more popular in China even in the world. At first, WeChat was a chatting social application, but now as the e-commerce blooming and comprehensive social software trending, it becomes a multifunctional social media platform. One of its functions, WeChat Pay, is very highly accepted and frequently used. It has been used by Chinese consumers for ordering food, booking movie tickets and taxis, paying utilities and sending red envelope and money to friends. As a popular e-commerce platform, in 2016, Starbucks in China announced a partnership with WeChat, authorising WeChat Pay can be used to make purchases at the nearly 2,500 Starbucks stores in Mainland China and allowing its users to gift Starbucks to their friends or family which boosted the sales and revenue of the physical visit and purchase in Starbucks stores.
(source from http://tech.qq.com/a/20161208/014729.htm)
In conclusion, it is obvious that digital innovation is a key revenue driver for Starbucks in China, as consumers in the region are more technology savvy and prefer digital modes of commerce and gifting such as e-wallets and social e-commerce. And a news said that usage of WeChat Pay and Ali Pay account for 67% payment method recently.
(source from http://mp.weixin.qq.com/s/5T88XveYuqpxW_ZmL8K-6Q)
Through this partnership, Starbucks can penetrate into this consumer base. Furthermore, this gifting initiative should enable Starbucks to build its brand in China Mainland and target the younger consumers (18-35 years old) who are the main users of WeChat.