Starbucks Gets a Delivery Partner in China

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Rumors have swirled for two days that Starbucks Corp. (NASDAQ: SBUX) would link up with China’s tech giant Alibaba Group Holding Ltd. (NASDAQ: BABA) to deliver coffee across much of the world’s most populous nation. The deal is official.

The two companies announced:

Marking a significant milestone for the two companies, Starbucks and Alibaba [are] poised to enable a seamless Starbucks Experience through deepened partnership.

Starbucks [will] collaborate across key businesses within the Alibaba ecosystem, including, Hema, Tmall, Taobao and Alipay, to significantly elevate the Starbucks Experience for Chinese customers:

[The companied announced] plans to leverage’s on-demand platform to pilot delivery services in Beijing and Shanghai in September 2018; delivery program to expand across 30 cities to more than 2,000 stores by end of 2018.

What the press release and management from the two companies did not say is whether they know there will be a surge in demand for hand-delivered coffee. If not, the announcement is nothing more than an announcement, and the project will burn out down the road.

Companies rarely post the results of these joint ventures, unless they are wildly successful. Don’t look for that announcement anytime soon. The partnership is nothing more than an experiment for now.