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August 3, 2018

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Starbucks, Alibaba to join forces

ALIBABA and Starbucks have entered into a partnership where the coffee chain will leverage the e-commerce giant’s digital and delivery network to access more consumers and compete with local boutique coffee shops.

Alibaba’s on-demand delivery service will offer delivery in 30 cities, covering 2,000 Starbucks outlets by the end of this year.

The two companies will also initiate partnerships in terms of membership integration and online marketing, according to a joint statement released yesterday.

Starbucks will also set up stalls inside Alibaba’s Hema Fresh Market stores to allow on-site purchase and delivery to nearby locations.

“The partnership will reshape modern retail, and represents a significant milestone in our efforts to exceed the expectations of Chinese consumers,” Starbucks chief executive officer Kevin Johnson said in the statement.

The collaboration will also cover other business units within the Alibaba Group such as its online payment platform, Alipay, and lifestyle services site Koubei.

Alibaba Group CEO Daniel Zhang said the experience of buying and drinking a cup of coffee would become more holistic.

Seattle-based Starbucks faces challenges from the quickly-shifting market where local coffee chains are leveraging digital activities to quickly grow and attract new consumers.

The company is also seeking to allow its 7 million members in China to unlock a “new digital lifestyle,” as new business models and offerings are reshaping shopping experiences.

Commenting on the competition in the local market, Johnson said they would stay focused on brand value, which is to offer a premium coffee experience.

Johnson said dialogue between the two parties began a year ago and they’ve been testing packaging and menu designs as well as a smart dispatching system to ensure swift delivery and high quality.


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