SHANGHAI — For years, Starbucks was the undisputed king of coffee in China.
It single-handedly created a market of coffee drinkers in a nation of tea lovers, cashing in on a wave of affluent Chinese who looked to Starbucks as an aspirational brand. The country quickly became the coffee chain’s second-largest market after the United States.
But Starbucks’s dominance in China is increasingly under attack, as growth begins to slow and competitors aggressively target coffee drinkers. Starbucks executives have come under scrutiny for being slow to adapt to technological shifts and retail trends in the country, namely delivery.
On Thursday, in a bid to revitalize its China operation, the company announced what it called a strategic “new retail” partnership with the Chinese tech giant Alibaba.
The partnership will allow Starbucks to pilot delivery services next month with an Alibaba subsidiary, Ele.me, and establish what it called delivery kitchens in Alibaba’s Hema supermarkets.
Starbucks will also integrate across Alibaba’s platforms to create a virtual Starbucks store so Chinese customers can have more personalized experiences, the two companies said.
“This is rocket fuel for our digital flywheel strategy in China,” Kevin Johnson, the chief executive of Starbucks, said Thursday at a news briefing in Shanghai.
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