China Economic Review

Starbucks teams up with Alibaba on coffee delivery

Starbucks Corp is set to announce a partnership with e-commerce giant Alibaba Group to roll out a coffee delivery service in China as the American chain looks to revive flagging sales in one of its most important markets, according to Reuters, citing media reports.

The tie-up with Alibaba was hinted at by former Starbucks Executive Chairman Howard Schultz earlier in July and could be announced as early as this week, according to the Wall Street Journal.

Starbucks announced a shock 2% fall in sales in China during its most recent quarterly report, a sharp contrast to the 7% growth it enjoyed a year earlier. The company attributed the fall to a crackdown on third-party delivery services in Chinese cities and the fact that its new stores were taking business from other established Starbucks outlets.

The Seattle-based firm is also facing tough competition from local rivals such as Luckin Coffee, which has opened nearly 700 stores since its founding just over seven months ago.