Starbucks and Alibaba Announce ‘New Retail’ Experience

Partnership will create a virtual Starbucks store and delivery service in China.

August 03, 2018

SHANGHAI, China – Starbucks and Alibaba announced a partnership that will expand the coffee giant’s delivery and digital presence in China.

In September, Starbucks will debut a delivery service and create a virtual Starbucks store by using “Starbucks Delivery Kitchens” in China. Its goal is to create an “unparalleled and even more personalized online Starbucks experience for Chinese customers” and to “transform the coffee industry in China,” according to an August 1 press release.

This partnership is part of Alibaba’s broader push for “New Retail”—an initiative launched in 2016 that aims to merge online and offline commerce experiences. The delivery-based initiative will utilize businesses within the Alibaba company, including Ele.me, Hema, Tmall, Taobao and Alipay.

Ele.me, a leading on-demand food delivery platform in China, will help create a customized delivery infrastructure to pilot the project in 150 stores this September. Delivery eventually will expand to more than 2,000 Starbucks stores across 30 cities by the end of 2018. Starbucks also will partner with Hema supermarkets for fulfillment and delivery logistics.

Customers that already use Alibaba’s apps will have an embedded and integrated Starbucks virtual store automatically at their fingertips. This means more than 500 million active users will have access to Starbucks.

“Thanks to the elevated customer experience delivered by our over 45,000 partners, Starbucks is growing and innovating faster in China than anywhere else in the world,” said Kevin Johnson, president and chief executive officer of Starbucks Coffee Co. in the press release. “Our transformational partnership with Alibaba will reshape modern retail, and represents a significant milestone in our efforts to exceed the expectations of Chinese consumers.”

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