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Starbucks Coffee Korea to test-run delivery service

Starbucks Coffee Korea

Starbucks Coffee Korea said that it would start a test-run for coffee deliveries and open a new delivery-only outlet.

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According to the coffee chain, it will open Yeoksam E-mart branch in Gangnam, Seoul on 27th November, where the coffeemaker will take only delivery orders made from the company’s mobile app.

The 100-square-meter store will act as the space for employees to make drinks and prepare food, and for storing merchandize, Starbucks said. It will also have space for delivery workers to wait to pick up the orders, but it will not be open to general customers, the company added.

The coffee chain said it would open a second such outlet, the Starlit Daechi branch, also in Gangnam, in mid-December. From the two outlets, Starbucks seeks to receive feedback and gather data for future operation of the service, the company said.

Delivery orders can only be made with the Starbucks mobile app, and to the areas within 1.5 kilometers of the outlet. The minimum order is set at US$13.45, with an additional 3,000 won delivery fee, Starbucks said.

The company is partnering with delivery agency Barogo, a Korean startup, for the service.

Starbucks first ran delivery services in the US. With Starbucks Coffee Korea beginning its delivery services, it will be the 16th country to offer delivery.

Starbucks said it has conducted tests to find ways to maintain the same quality of its beverages and food items after delivery. From the tests, the company selected 60 drinks, 40 food items and 50 types of merchandize for the service.

The market size of specialist coffee and tea shops in South Korea was $4.77 billion in 2019, ranking as the 3rd largest market globally, according to Euromonitor International Korea.

“Although Starbucks has been securing a leading position in South Korean market with its premium positioning, its brand image has been slowly moving towards the mass segment, which means delivery service will not necessarily damage the perception of the brand,” Kim Young-mi, a research analyst at Euromonitor International Korea said.

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“Therefore, the introduction of delivery service in the South Korean market is timely, given that local brands such as Ediya Coffee, Twosome Place, and Mega Coffee are showing strategic moves, narrowing the gap with Starbucks,” continued Kim Young-mi.

(Source: Korea Herald)