Tencent to help Tim Hortons China roll out over 1,000 outlets

1 min readUpdated May 14, 2020May 15, 202011:00 PM

In this article (5)

Chinese social networking and gaming giant Tencent is partnering with Tim Hortons China to expand the Canadian coffee house’s rollout.

Tencent announced the partnership on its Chinese social media accounts without disclosing any financial details.

Tim Hortons China has traded since early last year and is expected to use the new funding to set up a WeChat app as well as opening new physical locations outward from its highest concentration of stores in Shanghai. The firm has set a general initial target of 1500 outlets in the territory.

The firm may be taking a leaf out of Starbucks’ former arch-rival Luckin Coffee’s playbook in focusing on digital business. Luckin expanded swiftly in China using the strategy before becoming embroiled in a financial fraud scandal.

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What this means

Tencent's backing provides Tim Hortons China a formidable digital platform, positioning it for rapid scaling through WeChat integration and new physical locations. This move directly challenges established players like Starbucks, who also heavily utilise digital, by deploying a hyper-localised, tech-driven expansion strategy reminiscent of Luckin Coffee's initial, albeit flawed, success. Given Panpuri's ambitious 16-store Asian expansion and Kau Kee's new retail opening, Tim Hortons' digital-first approach could prove highly effective in China's competitive market, unlike New Zealand's Odi's direct sales in Australia. However, the risk lies in managing rapid growth without compromising product or service, a lesson learned from Luckin. The true test will be Tim Hortons' store count by year-end.

Rajiv Menon · Retail News Asia newsroom

Questions & Answers

What is the primary purpose of this new partnership between Tencent and Tim Hortons China?

Tencent is partnering with Tim Hortons China to help expand the coffee house's rollout, including setting up a WeChat app and opening new physical locations. This collaboration aims to accelerate growth and reach the target of 1500 outlets.

What is the targeted number of Tim Hortons outlets in China?

Tim Hortons China has set an initial target of 1500 outlets within the territory. The current expansion efforts, supported by Tencent, are working towards achieving this goal.

What digital strategy might Tim Hortons China be adopting through this partnership?

Tim Hortons China may be focusing on a digital business strategy, potentially taking inspiration from Luckin Coffee's approach. This involves using a WeChat app and digital platforms for expansion.

Are there any financial details available regarding this partnership?

No, Tencent announced the partnership on its Chinese social media accounts but did not disclose any financial details. The article does not provide information on the monetary aspects of the deal.

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