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Starbucks and Alibaba Group announce partnership to transform China experience

Starbucks and Alibaba Group Holding announced a strategic “new retail” partnership on 2 August that aims to deliver a seamless Starbucks experience and transform the coffee industry in China.

Collaborating across key businesses within the Alibaba ecosystem, including Ele.me, Hema, Tmall, Taobao and Alipay, Starbucks revealed plans to pilot delivery services beginning September 2018, establish Starbucks delivery kitchens for delivery order fulfillment, and integrate multiple platforms to co-create an unprecedented virtual Starbucks store – and even more personalised online Starbucks Experience for Chinese customers.

“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,” says Kevin Johnson, President and Chief Executive Officer, Starbucks Coffee Company. “Our transformational partnership with Alibaba will reshape modern retail, and represents a significant milestone in our efforts to exceed the expectations of Chinese consumers. Starbucks China is one to watch, and I have full confidence in the team that will bring the new innovation behind the Starbucks Experience to life.”

The strategic partnership is part of Alibaba’s broader "new retail" push, which aims to transform how commerce is conducted by merging online and offline experiences. "New retail" was introduced by Alibaba in 2016 and has since become a hallmark strategy of the retail industry.

Working with Ele.me, China’s leading on-demand food delivery platform with 3 million registered delivery riders, Starbucks will pilot delivery this September in 150 stores located in key trade zones in Beijing and Shanghai with plans to accelerate and expand its delivery program to more than 2000 Starbucks stores across 30 cities by the end of calendar year 2018.

"Starbucks is more than a destination for premium coffee and we share the same vision to pioneer a new coffee culture and lifestyle through innovation and technology. Alibaba is thrilled to expand our existing partnership with Starbucks by leveraging our cutting-edge New Retail infrastructure and digital power to enable an unprecedented experience for consumers,” says Daniel Zhang, Chief Executive Officer of the Alibaba Group.

Both Starbucks and Ele.me collaborated to develop a unique, customised delivery infrastructure that has been meticulously determined each step along the way, including dedicated Ele.me delivery riders, precise delivery time, and custom carriers.

Both companies have created a tailored order-to-delivery Starbucks program that upholds the unparalleled experience and quality that customers have come to expect in Starbucks retail stores.

In addition, Starbucks will partner with Hema supermarkets to be the first retail brand to establish dedicated Starbucks delivery kitchens within their locations. The kitchens will utilise Hema’s delivery capabilities to complement the delivery of Starbucks coffee and tea beverages offered through existing Starbucks stores. 

This intentional strategy will inform the future network planning for new Starbucks stores, combined with Starbucks delivery kitchen locations, to further expand the scale and reach of Starbucks delivery services. Starbucks will open Starbucks delivery kitchens in selected Hema supermarkets in Shanghai and Hangzhou as soon as September 2018, with plans to expand its presence to other cities over time.

“Our Chinese customers have a high expectation of their Starbucks Experience and we are proud to introduce a premium delivery experience that reflects the same service and quality they’ve come to love and expect from us in our stores – we will never compromise,” says Belinda Wong, chief executive officer, Starbucks China. “More significantly, through our partnership with Alibaba, we are breaking the physical and virtual barriers between the home, office, in-store and digital space, making China the first Starbucks market to deliver a seamless Starbucks experience across all facets of our customers’ lives and further reflecting the uniqueness and strategic importance of the market.”

A key strategic initiative under the partnership is the development of a pioneering, first-of-its-kind virtual Starbucks store in China. This digital partnership will see Alibaba develop a centralised online management hub, with the unique capabilities to integrate and deliver a consistent Starbucks experience across multiple digital platforms. This latest innovation aims to revolutionise the traditional offline-to-online model by effectively extending the reach of the Starbucks experience into the everyday lifestyle ritual of the Chinese consumer, regardless of time or place, whether it is at home or in the office, within a Starbucks store or online.

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