(Reuters) Starbucks has partnered with China’s leading food delivery entity Meituan for the distribution of coffee as it seeks to grow Covid-19 hit sales in its second-biggest market.
Chinese consumers will be able to place coffee orders and make reservations at Meituan’s stores through the company’s super-apps platforms.
The coffee chain maker says it will launch the so-called 1971 Salon service that allows users of Meituan to make private bookings to taste, as well as make coffees at Starbucks stores.
Starbuck’s move happens when the coffee market in China faces competition, with the company also seeking to expand its presence in the country.
China Internet Data Center president Liu Xingliang believes Starbucks will expand its service by bringing on board more partners, with concerns of dwindling store traffic amid the Covid-19 outbreak seen to prompt Starbuck’s aggressive move to boost deliveries.
Starbucks’s expansion in China comes amid scrutiny over its products by multiple local governments in December, following reports that it used expired ingredients for its drinks.
Meituan held about 68.2% of China’s food delivery market in Q2 2020 and had up to 668 million paying users as of the end of September. Starbucks has 5,360 stores spread in over 200 Chinese cities, with local comparable sales down 7% in the fourth quarter.
3690: HKG is down -0.37%, SBUX: NASDAQ is down -0.75% on premarket.
