As previously reported here on Sprudge, Starbucks is feeling the heat in China. Multiple competitors—most notably Tim Horton’s and Luckin Coffee—are making big pushes within the country to knock Starbucks off the top of the hill. But Starbucks isn’t going down quietly. According to the Wall Street Journal, the Big Green Mermaid has agreed to join forces with Alibaba to offer a coffee delivery service.
Those in the coffee industry may be familiar with the name Alibaba, especially those in the product creation side of the biz. Alibaba is a Chinese-based clearinghouse of sorts for all manner of coffee products—more than a few of them using potentially stolen intellectual property—at bargain basement prices. They are also the owner of Ele.me, a food delivery service that can be found in thousands of cities within China, and it is this brand in particular that Starbucks in interested in.
According to the article, Starbucks will announce this week that they will be teaming up with Ele.me to deliver coffee and baked goods starting this fall. This move comes after a government crackdown on third-party delivery services that is at least partly to blame for Starbucks’ sales dropping by 2% over the past three months as well as a response specifically to Luckin Coffee, a Chinese upstart who has raised over $1 billion and opened over 600 locations this year alone, “mostly bare-bones shops where the coffee is brewed and carried to customers by scooter-riding delivery workers.”
Coffee is big money in China right now and Starbucks in looking to hold onto their estimated 80% market share. But it won’t be easy. Luckin, Tim Horton’s, and Costa are all trying to chip away at the coffee behemoth. Perhaps teaming up with Alibaba will keep the wolves at bay. Or maybe soon we’ll all be able to buy knock-off Howard Schultz’s for $.50 a pop (minimum order 500).
Top image via Camera Courage.