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Starbucks & Alibaba Team Up to Offer Voice Ordering in China

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Starbucks Corporation (SBUX - Free Report) is poised to take delivery services to the next level. To this end, the company has signed a partnership deal with Alibaba Group Holding Limited (BABA - Free Report) for offering voice ordering and delivery to its customers in China.  

Chinese customers can now order Starbucks beverages and food via Alibaba’s smart speaker — Tmall Genie. Deliveries will arrive at the customer’s doorstep within 30 minutes. Last year, Starbucks had entered a historic partnership with Alibaba to provide seamless Starbucks Experience. Following the deal, Starbucks began delivery services in Beijing and Shanghai via Alibaba's platform.

Starbucks China's VP of digital ventures, Molly Liu, stated that “We are focused on ensuring that Starbucks voice ordering is truly personal, and we look forward to offering our customers more convenient moments and new opportunities to engage with Starbucks on a single integrated platform as they move throughout the day.”

Digitalization to Drive Growth

Per eServices report, global online food delivery market is worth $95 billion. Through 2023, it is likely to grow by 11% annually. Moreover, the US online food delivery market, estimated to be worth nearly $17 billion in 2018, is likely to reach a value of $24 billion by 2023.

Furthermore, Starbucks has been focusing on expanding delivery services globally. Evidently, the company has stared online delivery services in China, Japan, India, Hong Kong, Singapore, Indonesia, Vietnam, Mexico, Colombia and Chile. These efforts are aimed at capitalizing on the robust online food delivery market.

At present, Starbucks Delivers program has been expanded to more than 2,900 stores in China across nearly 80 cities. By the end of 2019, the company expects to expand Starbucks Delivers to 3,000 stores. Starbucks' business in China is rapidly growing due to innovative store designs, local product innovations and the success of the MSR program.

Recently, the company also inked a deal with Uber Eats to roll out Starbucks Delivers across the United States by early 2020. This apart, digital initiatives like mobile order/pay, delivery services and third-party loyalty partnerships should stimulate the company’s robust sales trends in the Americas segment. The partnership will help Starbucks expand its customer base.

A glance at this Zacks Rank #2 (Buy) company’s price trend in the past six months shows that it has gained 27%, outperforming the industry’s 16.2% growth.


Other Key Picks

Some other top-ranked stocks, which warrant a look in the same space, include Chuy's Holdings, Inc. (CHUY - Free Report) and Shake Shack Inc. (SHAK - Free Report) . While Chuy's Holdings sports a Zacks Rank #1 (Strong Buy), Shake Shack carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Chuy's Holdings and Shake Shack have an impressive long-term earnings growth rate of 17.5% and 22.5%, respectively.

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