According to a report, Starbucks Corp is collaborating with Alibaba’s Ele.me, to deliver coffee in China.
Chinese online food delivery system, Ele.me is a subsidiary of e-commerce giant, Alibaba Group Holdings Limited and has a network of over three million delivery men.
The deal will be commenced later this week, where the online food delivery giant will start providing Starbuck’s coffee and snacks around this fall.
An Alibaba representative stated, “Alibaba and Starbucks are always exploring new ways to deepen our long-term partnership in China. We have nothing more to share at this point.”
Record profits in the US but a slight loss in China
A week ago, Starbucks revealed a record fiscal of third-quarter income with benefits, topping Wall Street estimates. However, in China, Starbucks reported an increase in sales up to 4 and 6 percent in two periods, and decrease in sales to 2 percent in the last quarter.
To improve its sales, Starbucks said that it would start testing new delivery alternatives in Beijing and Shanghai beginning from the financial year of 2019.
Belinda Wong, CEO of Starbucks China said, “Let me assure you that our new delivery service will adhere to the high standards our customers in China have come to expect, as we expand our business.” She further added, “Delivery as a whole is becoming a lifestyle ritual in China, and consumer behaviors are changing.”
Earlier this month, Starbucks’ active official executive, Howard Schultz, indicated a potential team up with Jack Ma’s Alibaba that would enable Starbuck to boost its online espresso sales in China.
Starbucks, which has over 3,000 stores in China, faces the biggest competition from a home grown start-up, Luckin Coffee, which recently raised an amount of $200 from its investors that valued the on-demand coffee delivery start-up at $1 billion. Currently, Luckin has around 660 outlets in 13 cities across China.