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Starbucks to partner with Alibaba to boost sales in China

The US-based coffeehouse chain is set to partner with Chinese e-commerce giant Alibaba Group to revive its business in China, according to media reports.

The Wall Street Journal reported on Monday that a formal announcement of the deal will be made later this week, but Starbucks declined to comment.

The partnership with Ele.me, Alibaba’s food delivery arm, is expected to help fuel Starbucks’ growth in China, as its quarterly sales in China declined 2% in the period ended on 1 July, a steep departure from the 7% growth in the same period a year earlier.

Fierce competition from Chinese rivals such as Luckin, which has opened more than 660 outlets in 13 Chinese cities since January, a crackdown on unapproved third-party delivery services as well as cannibalisation of its own stores with the retailer’s rapid expansion in the Chinese market are among the lead causes of business decline.

Starbucks said it was making progress on plans for delivery. Beijing and Shanghai will be the first to enjoy the service.  Starbucks also aims to almost double its number of stores in China by 2022.

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