SHANGHAI (Reuters) - Starbucks Corp (SBUX.O) launched on Thursday a partnership with Alibaba Group’s (BABA.N) Chinese food delivery platform Ele.me, in a move to shore up sales in its second-largest market and to battle aggressive competition from local coffee start-ups.
FILE PHOTO: A Starbucks Corp drive-through location closes down for anti-bias training in Oceanside, California, U,S., May 29, 2018. REUTERS/Mike Blake/File Photo
Starbucks flagged in June that it was pursuing such a tie-up after reporting a sudden slowdown in China sales growth, which it partly blamed on a government crackdown on third-party delivery firms that had previously helped drive orders at its cafes.
The Seattle-based company will begin delivery services in September from 150 Starbucks stores located in key trade zones in Beijing and Shanghai and plans to expand that to more than 2,000 stores across 30 cities by the end of 2018, Starbucks and Alibaba said in a joint statement on Thursday.
The companies will collaborate across businesses within the Alibaba group, including Ele.me, supermarket chain Hema, online retailers Tmall and Taobao, and mobile and online payment platform Alipay.
The delivery program will leverage Ele.me’s 3 million registered riders and Starbucks will establish “Starbucks Delivery Kitchens” inside Hema stores and use the supermarket’s delivery system to fulfill Starbucks delivery orders.
The partnership with Alibaba “will reshape modern retail, and represents a significant milestone in our efforts to exceed the expectations of Chinese consumers,” said Starbucks Chief Executive Kevin Johnson said in the statement.
China has offered Starbucks rich pickings in recent years, thanks to a burgeoning cafe culture which has helped offset growing saturation in the United States. It has 3,400 stores in the country and plans to almost double that number by 2022.
But it is coming
