In an article titled “Can Alibaba Help Starbucks Regain Its Mojo in China,” The Motley Fool discusses Starbucks’ announcement that it will be partnering with Alibaba “to deliver drinks and snacks to Chinese consumers later this year.” One of the drivers behind this partnership is an acquisition made by Alibaba of Ele.me, the leading food delivery platform in China.
According to Motley Fool, Starbucks says that it will “pilot delivery services beginning September 2018.”
This partnership announcement is strategic in that Starbucks needs to look at different opportunities to continue growth in China as its Q3 2018 sales in the region have shown a decline.
“China was once Starbucks’ strongest market, but comparable-store sales in the region declined in the most recent quarter.”
The idea of food delivery is certainly not new. However, over the past couple of years there has seemed to be a growing food delivery trend that extends beyond the normal takeout food market (beyond Chinese food and pizza in the U.S., for example) This growing trend has given rise to such companies like Uber Eats and will likely continue as more merchants embrace this delivery channel. What is innovative in this partnership between Starbucks and Alibaba is its establishing Starbucks delivery kitchens:
“ ‘Starbucks Delivery Kitchens’ for delivery order fulfillment and integrate multiple platforms to co-create an unprecedented virtual Starbucks store — an unparalleled and even more personalized online Starbucks Experience for Chinese customers.”
Overview by Ryan McEndarfer, Editor-in-chief at PaymentsJournal.com
