Starbucks Corp plans to join forces with Alibaba Group Holding Ltd (阿里巴巴) to begin delivering its drinks and baked goods in China, according to people with knowledge of the plans, rolling out an effort to stave off competitors and turn around sales in the country.
Ele.me (餓了麼), the meals delivery service owned by Alibaba, would handle the logistics in a deal that would be announced tomorrow, according to the people.
Starbucks last week said it plans to start deliveries with a partner this fall in Beijing and Shanghai.
Ele.me commands hundreds of thousands of delivery personnel on a daily basis across China and is syncing that logistics network with its e-commerce parent to enhance efficiency.
A Starbucks representative said it does not comment on speculation.
Alibaba said the company and Starbucks are “always exploring new ways to deepen our long-term partnership in China.”
The two companies partnered to make visits to Starbucks’ Roastery high-tech store in Shanghai interactive.
Starbucks is coming to the delivery game late as it faces a rare sales decline in the world’s second-biggest economy.
The company has said it aims to establish itself as a daily routine for tech-savvy consumers in China, which the company expects to surpass the US as the company’s biggest market within a decade.
“Delivery as a whole is becoming a lifestyle ritual in China, and consumer behaviors are changing,” Belinda Wong (王靜瑛), chief executive officer of the chain’s Chinese business, said on a conference call last week.
The tie-up would extend beyond deliveries, one of the people said, without elaborating.
The partnership would also not be exclusive, and Starbucks’ tie-up with Tencent Holdings Ltd (騰訊) on mobile payments and social gifting is unaffected, the person said.
The coffee chain would be the latest to jump onto the delivery bandwagon in a country where everything from fresh produce to forklifts can be purchased online and shipped the same day.
China’s vast sprawl has proven a challenge. The company is responding in part to competition in urban areas from the likes of local chain Luckin Coffee (瑞幸咖啡).
Starbucks reported a sales drop of 2 percent for comparable stores in its most recent quarter in China, trailing analysts’ estimates.
The chain aims to triple its revenue in China in five years.
It plans to operate 6,000 stores in 230 Chinese cities by the end of fiscal 2022 — a rate of a new store every 15 hours.
Chinese business news outlet Caijing had earlier reported the tie-up.
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