Starbucks makes huge delivery move in key market
Less than two months after launching delivery in China, Starbucks Corp. is expanding in a big way.
Through its partnership with Alibaba, the coffee giant now offers delivery service in more than 1,100 stores in 17 Chinese cities, with full-service coverage in Beijing and Shanghai. The program, called Starbucks Delivers, originally launched in 150 stores in Beijing and Shanghai in September.
The service is integrated within Alibaba’s on-demand platform, ele.me. The intelligent order-and-delivery system automatically chooses the nearest Starbucks location to fulfill an order to ensure timely and efficient delivery. The platform includes delivery riders, precise delivery time, and custom carriers. All orders are served in specially-designed spill-proof lids, for hot and cold beverages, and tamper-proof packaging seals. Unique Ele.me delivery containers also ensure the right temperature and standards to uphold beverage and food quality and safety.
To support the operation, Starbucks launched its first “Star Kitchens” in two Hema supermarkets in Shanghai and Hangzhou. Each Star Kitchen will utilize Hema’s fulfillment and delivery capabilities, within a 30-minute delivery time-frame, to further expand the scale and reach of Starbucks delivery services. Starbucks plans to expand the presence of the kitchens to other Chinese cities over time.
“Our market-leading scale and the positive customer trial and adoption we have seen in the first two months of operations have given us even greater confidence that we will successfully bring this exceptional delivery experience to more than 2,000 stores across 30 cities by the end of year,” said Belinda Wong, CEO, Starbucks China.
The coffee giant aims to leverage the delivery practices it’s learning in China, and “apply them to other parts of the world, including the U.S.,” Kevin Johnson, the company’s president and chief executive, said in a report from CNBC.
These enhancements coincide with Starbucks’ aggressive Chinese expansion plan, which is already underway. In May, the coffee giant announced plans to build 3,000 stores — 600 net new stores annually — during the next five years in Mainland China, which will double the market’s store count from its current 3,300 locations. Starbucks said it expects to more than triple revenue and more than double operating income in China by the end of fiscal year 2022 from fiscal year 2017.
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