Home Business & Finance Starbucks and Alibaba Group form strategic partnership to transform the customer experience in coffee industry in China

Starbucks and Alibaba Group form strategic partnership to transform the customer experience in coffee industry in China

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SHANGHAI / HANGZHOU: Starbucks  Coffee  Company  (“Starbucks”)  (NASDAQ: SBUX) and Alibaba Group Holding Ltd. (“Alibaba”) (NYSE: BABA) today announced a deep, strategic “New Retail” partnership that will enable a seamless Starbucks Experience and transform the coffee industry in China. 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, establish “Starbucks Delivery Kitchens” for delivery order fulfillment and integrate multiple platforms to co-create an unprecedented virtual Starbucks store  –  an unparalleled and even more personalized 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  revolutionize  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 Kevin Johnson, president and chief executive officer, Starbucks Coffee Company. “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.”

Daniel Zhang, Chief  Executive Officer  of the Alibaba Group 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. 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.”

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.

Creating an Unparalleled Order and Delivery Experience Powered by the Alibaba Ecosystem

Best-in-class coffee delivery service through Ele.me

Working  with  Ele.me,  China’s  leading  on-demand  food  delivery  platform  with  3  million  registered  delivery  riders, Starbucks will pilot delivery this September 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,  customized  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. We are pleased to partner with Starbucks to launch these  reliable  and  trusted  delivery  services  to  satisfy  customers’  needs  and  capitalize  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,” said Wang Lei, Chief Executive Officer of Ele.me.

Distinct Fulfillment and Delivery Capabilities through Hema Supermarkets

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 utilize Hema’s distinct fulfillment 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  our 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 Belinda Wong, chief executive officer, Starbucks China. “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.”

Digital Innovations Transforming the Retail Industry

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  centralized  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 personalized Starbucks digital experience across the Starbucks app and Alibaba’s customer-facing mobile apps, including Taobao, Alipay, Tmall and Koubei.

This latest innovation will revolutionize the traditional offline-to-online model by effectively extending the reach of the Starbucks Experience into the everyday lifestyle ritual of the Chinese consumer, regardless of time or place. Whether it is at home or in the office, within a Starbucks store or online, Starbucks customers will be able to access and enjoy a one- stop Starbucks Experience when purchasing merchandise online, buying a Starbucks handcrafted beverage to be delivered to  a  friend  or  sending  a  Starbucks  gift  of  love  on  the  “Say  it  with  Starbucks”  social  gifting  platform.  Starbucks  will progressively  integrate  its  Starbucks  Rewards  (SR)  membership  platform  onto  the  centralized  system  to  leverage  its

consumer insights to deliver a truly personalized experience to its customers, while establishing a strong foundation for the future development of Starbucks digital experiences in China.

Starbucks  and  Alibaba  are  trusted  business  partners  who  share  common  values  in  the  spirit  of  innovation  and  the unrelenting pursuit of product and service excellence. This deepened partnership is a significant step as both companies partner together to elevate the customer experience across China. Says in press release

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