Alibaba and Starbucks form strategic partnership

Technology and e-commerce conglomerate, Alibaba, and US-based coffee company, Starbucks, are partnering to transform China’s coffee industry.

Collaborating across key businesses within the Alibaba ecosystem, including Ele.me, Hema, Tmall, Taobao and Alipay, Starbucks announced plans to pilot delivery services beginning September 2018, establishing ‘Starbucks Delivery Kitchens’ for delivery order fulfilment and integrating multiple platforms to co-create an unprecedented virtual Starbucks store – an unparalleled and even more personalised online ‘Starbucks Experience’ for Chinese customers.

The announcement marks a historic moment as two iconic, global companies build on their distinct retail and technology strengths to revolutionise the customer experience. Leveraging the Alibaba ecosystem and ‘New Retail’ infrastructure, Starbucks will be able to further unify a seamless Starbucks experience between its stores and online for 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,” said Starbucks President and CEO, Kevin Johnsony.

“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,” he said.

“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,” said Alibaba Group CEO, Daniel Zhang.

“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. This partnership is again a testament to the success of our New Retail strategy,” he said.

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 three million registered delivery riders, Starbucks will pilot delivery in 150 stores located in key trade zones in Beijing and Shanghai with plans to accelerate and expand its delivery program to more than 2,000 Starbucks stores across 30 cities by the end of calendar year 2018.

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. Through this delivery partnership, Starbucks and Ele.me have pioneered a best-in-class coffee delivery service standard for Chinese customers.

“Ele.me has a robust infrastructure for on-demand delivery in China,” said ELe.me CEO, Wang Lei. “We are pleased to partner with Starbucks to launch these reliable and trusted delivery services to satisfy customers’ needs and capitalise on the delivery sector’s great potential. It is an important milestone for Ele.me to deepen our collaboration with retail chains and further expand our penetration in the food delivery sector.”

In addition, Starbucks will partner with Hema supermarkets to be the first retail brand to establish dedicated ‘Starbucks Delivery Kitchens’ within their locations. The Starbucks Delivery Kitchens will reportedly utilise Hema’s distinct fulfilment and delivery capabilities to complement the delivery of handcrafted Starbucks coffee and tea beverages offered through existing Starbucks stores. Starbucks will also leverage Hema’s highly effective consumer insights and unique fulfilment expertise to further penetrate and better serve the needs of individuals and families in communities across China.

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, while enabling its partners (employees) to continue to elevate the third-place experience for the customer. 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,” said Starbucks China CEO, Belinda Wong. “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 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 innovation will transcend the traditional limitations of a single-app visit by providing the consumer an elevated, and even more personalised Starbu

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