Starbucks confirms partnership with Alibaba in a bid to increase China sales | City A.M.

Starbucks is officially partnering with Alibaba in an effort to boost its delivery and online Chinese presence.

The tie-up comes after an abrupt drop in Starbucks’ China sales in June, which was pinned on a crackdown on third-party delivery firms that had helped propel orders in its stores.

Starbucks chief executive Kevin Johnson told reporters: “I consider this strategic parternship to be one that will just be rocket fuel for Starbucks’ growth and continued expansion in China.”

From this Autumn, the global coffeehouse will take advantage of Alibaba’s properties, such as supermarket chain Hema, online retailers Taobao and Tmall, mobile payment platform Alipay and delivery service Ele.me.

A virtual store is expected to open on Alibaba’s platforms, giving customers the chance to buy Starbucks merchandise. According to Johnson, it will “open up 500m or more active users of those apps that will have access to Starbucks.”

The beverage company plans to open 150 stores in Shanghai and Beijing, before expanding delivery to 2,000 stores in 30 cities before the end of the calendar year.

Starbucks are also set to launch 600 “Starbucks Delivery Kitchens” in Hema’s small-scale supermarkets throughout the forthcoming years. The stations will fulfill delivery orders for neighbouring areas, with an aim to complete delivery within half an hour.

The company did not say whether there will be a delivery fee, and declined to comment on the financial details of the partnership.

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