Starbucks is collaborating with Alibaba Group´s Chinese food delivery platform Ele.me to deliver coffee and snacks to Chinese customers. The deal is set to be announced later this week, according to the Wall Street Journal reported.
When contacted by CNBC about the partnership, Alibaba spokesperson said, “Alibaba and Starbucks are continuously working to develop long-term partnership in China.”
China had been Starbuck’s greatest development driver but same-store sales within the country fell 2% during the last quarter, compared with increments of 4% and 6% within the previous two periods.
The Company will start delivery services in September from 150 Starbucks stores in Beijing and Shanghai. The plan is to grow to more than 2,000 stores over 30 cities by the end of 2018.
“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 [there],” Belinda Wong, CEO of Starbucks China.
From homegrown start-up Luckin Coffee that raised $200 million from investors, Starbucks is facing expanding competition in China. The start-up started its operations this year and offers on-demand coffee through its app that is delivered to customers in 30 minutes or less. Orders that take more than half an hour are free.