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Starbucks Joins ele.me To Launch Doorstep Coffee Delivery

Sep 20, 2018 by The Passage Team
Starbucks Joins ele.me To Launch Doorstep Coffee Delivery

On Wednesday, Alibaba (阿里巴巴) and Starbucks rolled out the pilot project for their proposed doorstep coffee delivery service at select centres in Beijing and Shanghai, 36kr reports.

The development comes after the Chinese tech giant and the American coffeehouse chain signed a strategic agreement in August to start home-delivery of Starbucks coffee in Chinese cities.

Starbucks hopes that the tie-up will help it dam its declining revenue in China by gaining access to the users of the Alibaba-backed food delivery platform, ele.me (饿了么).

The Passage had previously reported about the compounding problems for Starbucks with the home-grown player Luckin Coffee (瑞幸咖啡), giving a tough competition to the US giant.

For now, the service will be available in Beijing at the World Trade Center, Wangjing, Shijingshan, Zhongguancun and other stores. The pilot sites in Shanghai are Xujiahui and Putuo District.

After the completion of the trial operation, by the end of this year, the delivery service will be extended to 2,000 stores in 30 cities across the country.

Prior to the launch of the new service, there was widespread concern that the new service would jeopardise Starbucks’ established offline business in China. Consumers were also apprehensive that the taste could also be compromised during transport.

To allay the fears, ele.me is reported to have developed a new ice pack and deploy special incubators and an exclusive distribution channel for Starbucks.

The ice pack reportedly uses TPU material outside, and ice film and an ice sheet refrigerant combination inside to ensure that the cold coffee retains the temperature it is meant to be served at.

According to the lab tests the ice packs can be kept within 5 degrees for up to 6 hours at normal room temperature. Previously, ele.me CEO Wang Lei had said that Starbucks coffee would be delivered within 30 minutes. The ice packs should be good enough to suit the needs.

Given the high cost of packaging, Wang Lei says Starbucks, ele.me and consumers would together have to foot the expenses. The current price has been proposed at CNY 9 ( USD 1.31) per order, significantly higher than ordinary delivery services.

Justifying the price, Wang Lei further explained that manufacturing the cup cover used by Starbucks would be ten times higher than that of an ordinary one.

Media reports at the time of the signing of the agreement had said that the two companies would collaborate across a range of Alibaba Group products including retail outlets Tmall and Taobao, payment platform Alipay and Hema, Alibaba-owned new retail store chain.

Alibaba expects the deal to expose it to more middle and high-class people which would help it crack open up new consumption niches. Prior to this Starbucks had no delivery operation in China, Reuters reports.

(Jing Cai is an intern at The Passage)

The Passage Team

The Passage is committed to creating in-depth content over technology industry across Asia with a focus on emerging startups in the technology, healthcare, education, food, tech, travel & mobility segments.

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