Pursuing China dream, Starbucks signs massive deal with Alibaba
Seattle-based coffee behemoth to extend presence into ‘all of the Alibaba Group properties’
It’s official. The world’s king of caffeine has teamed up with the supreme leader of China’s online retail universe to cement its growing presence in the country, and in a big way.
“We’re going to integrate a Starbucks virtual store into all of the Alibaba Group properties,” Starbucks CEO Kevin Johnson said in an interview on CNBC on Wednesday.
“This means that a customer that uses Alipay or Taobao or Tmall or Hema has an integrated Starbucks virtual store similar to the mobile app embedded right into that experience,” the CEO said. “That opens up 500 million or more active users of those apps that will have access to Starbucks.”
Johnson was referring to Alibaba’s mobile payment and e-commerce platforms, as well as the Chinese giant’s physical retail locations, called Hema, which are integrated with mobile apps.
The synergy the two companies will leverage in the deal underscores the importance of business cooperation between the United States and China, a message that Alibaba chief Jack Ma has been keen to promote. Even while facing political obstacles to expanding his company’s presence in the United States, Ma has expressed his desire to help US businesses tap into the Chinese market through Alibaba’s online platforms.
China is Starbucks second-largest market behind the United States, and the agreement with Alibaba marks a step towards making it number one.