Why is Starbucks so popular and beloved in Japan? Was it a stroke of luck or a carefully crafted marketing strategy? And how did iconic Japanese elements like green tea and sakura cherry blossoms find their way onto their menu?
Let’s discover the story of its first international venture and unravel the secrets behind Starbucks’ success in Japan.
Starbucks’ Joint Venture: A Strategic Expansion to Japan
Starbucks, the famous coffee shop in Seattle, entered Japan in 1996. This was its first international experience, and the company didn’t embark on the adventure without a proper plan. Instead, they entered into a 50-50 joint venture with Sazaby League, an established retailer and restaurant chain in Japan. This partnership allowed Starbucks to lay a solid foundation in Japan. They leveraged Sazaby’s deep knowledge of the local market, opened stores in several locations, and ended the partnership in 2004.
Today, they own more than 1600 stores across the country.
Starbucks’ triumph in Japan is based on more than its strategic partnership. It’s about how the brand adapted its marketing strategy to create a compelling experience, inviting Japanese to try a new way of enjoying coffee.
They changed the following to adapt to the Japanese market:
- Smaller serving sizes on the menu because Japanese people are used to smaller portion sizes
- Lower sugar levels in drinks as consumers prefer them to be less sweet
- Additional matcha-flavored items on the menu to cater to cultural taste
- Premium products at a budget-friendly price to target a diverse audience
- Call customers by a number instead of their name to pick up their order, which respects the privacy
Starbucks recognized early on how crucial research into local preferences and Japanese consumers would be to their success. That set the foundation for why Japanese customers adore the brand today, as Starbucks invested the time and resources to get to know its target audience.
Marketing Strategies That Set Starbucks Apart
1- Creating a Cozy Living-Room Atmosphere
Starbucks entered Japan at a time when the coffee scene was dominated by kissaten, small coffee shops reminiscent of tea houses with a simple menu that offered black coffee only. These minimalist but charming establishments were sprinkled throughout Tokyo.
Starbucks went beyond simply serving black coffee and instead aimed to create a completely reimagined café experience. The brand successfully transitioned from being a large coffee chain in America to a personalized, community-oriented coffee shop in Japan. They seamlessly integrated their stores with local culture, as evident in the architectural designs that reflect the beauty of their surroundings. For instance, you can discover the charm of a 100-year-old townhouse in Kyoto or an Edo-era building housing a Starbucks in Saitama.
Moreover, they differentiated themselves from the kissaten culture by selling high-quality coffee beans from overseas. Also, they prohibited smoking in their stores, despite most Japanese cafes. That didn’t stop people from trying Starbucks. In fact, these strategies led to its popularity as they opened its doors to a more diverse audience.
Today, Starbucks welcomes students cramming for exams, professionals discussing business, couples on dates, or tourists taking a break.
2- Cherishing Japan’s Seasons through Seasonal Marketing
Starbucks demonstrated an understanding of Japan’s love for seasonal items. For example, Starbucks launches its special and time-limited cherry blossom-themed menu each spring, featuring sakura-flavored drinks, foods, and pink merchandise. In summer, you can find melon- and strawberry-flavored items on the menu, while they serve Christmas-inspired drinks during winter.
3- Starbucks Collaboration with LINE
On the digital front, Starbucks collaborated with LINE, a popular Japanese messaging app. The launch of the digital LINE Starbucks card in 2019 was a game-changer, reaching over a million users in just 2.5 months. They implemented a rewards and order system that allowed customers to accumulate points for purchases and redeem them for free drinks and other rewards. This enabled the company to increase its customer loyalty, leading to more repeat purchases and higher sales.
Starbucks’ success in Japan can be attributed to its local strategic partnership, understanding of the market, localization of its products and services, and smart use of digital platforms such as LINE. These examples show how powerful a localization and marketing strategy can be if planned and executed properly. With a tailored strategy, you can elevate your brand in Japan and increase brand awareness and loyal customers.
Looking to Enter the Japanese market?
If your brand is looking to break into the Japanese market, we at COVUE enable you to grow your brand in Japan. Our comprehensive services encompass localization, marketing, and import compliance to ensure a seamless transition into this market.
Sources: Starbucks, Digital Marketing for Asia, Voyapon, Japan Wonder Travel