Starbucks expands in China with help of Alibaba Group

Starbucks announced a new collaboration with Alibaba Group with a new virtual store in China. This new store lets lets customers order their favorite beverages and food from the American coffee company across multiple Alibaba Group mobile apps and Starbucks’ own China app.

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The virtual store unifies Starbucks offerings inside Alibaba apps, including Taobao, Alipay and soon, Tmall. Alibaba’s technology underpins the unified experience.

The launch of the virtual store also exemplifies the capability of the “Alibaba Operating System” which aims to empower traditional retailers.

After years of development in this digital age, Alibaba has created a unique system to support enterprises in the process of digital transformation that covers critical areas such as retail, marketing, finance and logistics.

“This ground-breaking digital collaboration with Alibaba Group unlocks new levels of engagement unseen in the marketplace today with customers.”

Starbucks statement

Starbucks Expansion

This new expansion follows a pilot program called “Star Kitchens” Starbucks has been operating since October in China.

Starbucks piloted its first Star Kitchens within two Freshippo supermarket locations in Hangzhou and Shanghai.

Star Kitchens leverages Freshippo’s fulfillment and delivery capabilities, with delivery time of 30-minutes or less, to further expand the scale and reach of Starbucks’ delivery service. Presently, the “Starbuck Delivers” program covers 2,000 stores across 30 cities in China.

“Leveraging the strengths of our transformative strategic partnership with Alibaba Group, this new milestone in the Starbucks digital strategy will significantly fuel our capabilities to provide an even more personalized and enticing one-touch digital experience for the Chinese customers.”

Molly Liu, vice-president of digital venture of Starbucks China

Starbucks Virtual Store

The new Starbucks virtual store also lets customers buy gifts for their friends and loved ones via the “Say It with Starbucks” option.

Apart from gift cards, the store features Starbucks items and merchandise, such as coffee beans and mugs, from the Starbucks Tmall flagship store.

The virtual store is a boon for customers who are interested in or have enrolled in the Starbucks Rewards Program.

From membership registration, the redemption of benefits, to and a range of Starbucks branded offerings, the virtual store provides more avenues for customers to earn points from their purchases.

Starbucks said it expects the strong membership referral pipeline from Alibaba will help to fuel “an exponential growth” in its Rewards membership in China.

China Opportunity and Marketplace Growth

These new ventures prove that even large corporations like Starbucks find it easier to collaborate with existing marketplaces in countries such as China.

Last year Alibaba Group held two conferences in North America, Detroit and Toronto, to convince small businesses to look at the opportunities China may offer to them.

READ MORE: Alibaba Gateway 17 Detroit Conference Takeaways

While recent political spats between China and the U.S. on trade may have soured the relationship a little, the Chinese market is still a viable opportunity for small businesses, especially for U.S. made or grown products.

Alibaba Group continues to sign major western brands to enter the Chinese market because these brands find it easier to work with a local partner that can offer marketplace, logistics, and market expertise to avoid pitfalls in selling to Chinese consumers.

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