Starbucks is growing faster in China than anywhere else in the world and control 80% of their coffee market. And now they’re testing delivery for the first time, teaming up with ecommerce giant Alibaba. The service would be run through Alibaba’s food delivery unit called Ele.me.
Starbucks China CEO Belinda Wong said, “We begin this fall in Beijing and Shanghai, with plans to expand across the country as we enter calendar 2019.”
Starbucks previously partnered with Alibaba on the Starbucks Reserve Roastery in Shanghai, which is touted as the biggest Starbucks in the world where visitors can watch their coffee being roasted from start to finish.
The new deal will also see Starbucks integrate a “virtual store” to Alibaba’s online shopping and payment apps — such as Alipay, Taobao, Tmall, Kobe and Hema. That would allow users to order from Starbucks on their phones and have their drinks and food delivered to them in person
“That opens up 500 million or more active users of those apps that will have access to Starbucks,” Starbucks CEO Kevin Johnson told CNBC.
Deliveries from 150 stores in Shangai and Beijing are expected to begin in Fall of 2018. By the end of the year, the Starbucks Ele.me delivery will be available in 2000 stores across 30 cities.
But this move is coming much later than expected, as much of the country depends on delivery services for just about everything, and its main competitor, Luckin coffee has already established a firm foothold. Luckin coffee is an on-demand coffee startup and promises low prices and fast delivery. The startup, which launched this year, has seen tremendous growth, opening 525 stores in 13 cities in China and is valued at $1 billion.