Starbucks to launch virtual stores, coffee delivery service to combat sales slump in China

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A man walks past a Starbucks coffee shop in Beijing on August 2, 2018. Starbucks has announced a partnership with e-commerce giant Alibaba that will give the US coffee giant greater access to China's growing food-delivery market as it faces increased competition. Photo: AFP

Published: 8:00pm, 2 Aug 2018Updated: 11:12pm, 2 Aug 2018

Starbucks has formed a partnership with Alibaba Group Holding to deliver coffee and open virtual stores, a move designed to help the US coffee chain stay ahead of competition after same-store sales unexpectedly dropped in China last quarter.

Starbucks will provide coffee delivery services in Beijing and Shanghai from September, capitalising on the three million registered riders of Ele.me, Alibaba’s food delivery platform.

“The pace of innovation is far more rapid in China than any other market,” Starbucks chief executive Kevin Johnson told reporters on Thursday. “This partnership will enable a new retail experience for our customers.”

Initially, 150 Starbucks stores will offer delivery services and the number will be expanded to more than 2,000 across 30 cities by the end of 2018, Starbucks said.

Aside from Ele.me, Starbucks will also leverage Alibaba’s other businesses and platforms including supermarket chain Hema, online retailers Tmall and Taobao, and mobile and online payment platform Alipay.

Alibaba, which is the owner of the Post, will also support a virtual Starbucks store and a centralised online management hub to help the coffee company deliver “a consistent Starbucks experience,” the companies said in a joint announcement.