| China

Starbucks broadens digital reach in China with Alibaba app ordering

World’s largest coffee chain accelerates the pace of digital integration in China as the coronavirus pandemic intensifies demand for seamless coffee shop transactions

Starbucks CEO Kevin Johnson (centre right) with unnamed officials during a joint press conference with Alibaba in August 2018 | Photo: Starbucks 



Starbucks is broadening its digital reach in China by extending mobile pre-order and pick-up features across four Alibaba platforms. ‘Starbucks Now’ digital ordering was previously only available via the coffee chain’s own app in China, but will now be accessible via payment service Alipay, local services app Koubei, map provider, Amap and online shopping platform, Taobao.
 
The move expands a digital collaboration first announced between the world’s largest coffee chain and the Chinese e-commerce giant in 2018. The ‘deep strategic partnership’ saw Starbucks launch digitally integrated food and beverage delivery in China using Alibaba’s vast digital infrastructure and local expertise.
 
The widening of Starbucks’ digital availability in China will give the Seattle-based coffee chain a deeper foothold in country’s highly opportune ‘new retail’ economy. The measures also complement the heightened imperative of minimising in-store interactions in the wake of the coronavirus pandemic.
 
Starbucks had previously indicated it planned a gradual increase in app-based ordering and click & collect across a 3-4 year timeframe, but has since moved to accelerate the integration of seamless transactions into its global portfolio. In June 2020, Starbucks launched its ‘Pickup’ concept in the US, a grab-and-go store format revolving around app-based ordering, kerbside pick-up and delivery.
 
Starbucks’ has continued to invest in its strategically important Chinese business even as the coronavirus pandemic caused severe disruption. In March 2020 the coffee giant announced it would invest $130m constructing a state-of-the-art roastery, storage warehouse and distribution complex, its largest outside the US, near Shanghai.
 
The investment was announced even as the coffee chain suffered coronavirus store closures in China, with comparable store sales down 50% in the 13 weeks to 29 March 2020 and, reportedly costing $430m in lost revenues during the period. However, in June 2020, Starbucks said 99% of its stores in China had reopened and that trading had largely returned to pre-pandemic levels.

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