Please ensure Javascript is enabled for purposes of website accessibility

Starbucks to Make Big Tech Investments in China

By Jennifer Saibil – Apr 27, 2020 at 11:12AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The coffee king is teaming up with Sequoia Capital to increase its muscle in one of its fastest-growing markets.

Starbucks (SBUX -0.63%) announced that it's partnering with venture capital firm Sequoia Capital to invest in Chinese tech companies in the food and retail industries.

Taking coffee to the next level

Starbucks has invested in data-driven technologies in the U.S. in its efforts to remain No. 1 in its industry and continue to provide an unparalleled experience for its customers. Some of those technologies include the ability to predict what customers want in different locations, its mobile order and pay apps, and digital menu offerings at its drive-thrus based on previous customer preferences.

The exterior of a flagship Starbucks location in China.

Image source: Starbucks.

Making it work in China

China is one of Starbucks' biggest markets. The company previously partnered with tech company Alibaba to bring voice ordering and delivery services to customers in that region.

Some of the benefits Starbucks might see from these new tech ventures include bringing digital more acutely into its operations, integrating inventory management solutions, and optimizing retail operations. The partnerships will work both ways, with Starbucks gaining better technologies and its partners benefitting from being able to tap into Starbucks' retail and business expertise. 

"China's vibrant environment is a rich ground for entrepreneurship that has seen the emergence of many local innovators that we hugely admire," Belinda Wong, CEO of Starbucks China, said in a statement. "The partnership enables Starbucks to tap into the most dynamic Chinese technology entrepreneurs."

Starbucks has reopened its stores in China that were closed during the height of the COVID-19 pandemic there.

In March, Starbucks announced that it planned to develop a Coffee Innovation Park in China to expand its roasting network and fuel further growth there. It will house the company's largest roasting facility outside of the U.S. 

Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alibaba Group Holding Ltd. and Starbucks. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Starbucks Corporation Stock Quote
Starbucks Corporation
SBUX
$84.17 (-0.63%) $0.53
Alibaba Group Holding Limited Stock Quote
Alibaba Group Holding Limited
BABA
$78.80 (-2.37%) $-1.91

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.