Subsidies play a key role in the coffee company’s plan to seize the Chinese market.
With tech giants moving aggressively into new retail, the coffee market is reaching its boiling point.
Guo Jinyi, co-founder and senior vice president at Luckin, responded to the Alibaba-Starbucks deal by saying that traditional retail, even with the increased takeaway and mobile payments, is not necessarily new retail since the fundamental business model had not changed.
The Starbucks delivery service, for now, is only available in 10 stores in Beijing and Shanghai respectively.
Alibaba Local Services Company is embracing “new retail” to fend off competitors such as Tencent-backed Meituan.
Starbucks partnered up with Alibaba in August hoping to tap into China’s red-hot on-demand delivery market.