Starbucks Adds Meituan Delivery After Ele.me Exclusivity Expires

This is an English adaptation of a FoodBud historical article originally published on January 8, 2022.

FoodBud cited Sina Tech in reporting that Starbucks’ original three-year exclusive partnership with Ele.me expired on December 31, 2021. At the time, Starbucks China was looking for new delivery partners.

Starbucks’ dedicated delivery service, Zhuanxing Song, had recently appeared on Meituan Waimai. Store information suggested that Meituan’s delivery channel and Starbucks’ membership system had also been connected.

Why the Shift Matters

Industry observers linked Starbucks’ more open delivery strategy to China’s antitrust trend, especially the move against “pick one of two” exclusive platform arrangements. Once exclusive cooperation models came under pressure, binding the brand to a single platform was no longer the priority.

One industry view cited in the article was that coffee retail consumption habits had changed and competition had become intense. Starbucks was no longer satisfied with a single exclusive partnership model, and plans to open more delivery channels had reportedly been discussed internally for some time. After regulators halted “pick one of two” platform behavior, Starbucks accelerated multi-party cooperation.

Membership Data Was Connected

Searching Starbucks on Meituan Waimai showed a dedicated Starbucks page, including recommendations for the fastest delivery stores. Each listed store showed delivery times within 30 minutes, matching the standard Starbucks previously set with Ele.me.

The article noted that even Heytea, backed by Meituan’s Long-Zhu investment arm, did not have the same type of dedicated page.

By giving Starbucks an official page and placing official stores higher in search results, Meituan effectively displaced third-party Starbucks purchasing agents on the platform.

Starbucks also offered new-user registration coupons on Meituan Waimai, though the article noted these coupons may have been funded by Meituan itself.

After users linked their Starbucks membership on Meituan Waimai, their Starbucks Star-level data synchronized automatically. FoodBud interpreted this as Starbucks opening membership data integration with Meituan Waimai.

From Ele.me Exclusivity to Meituan Cooperation

In 2018, Starbucks and Alibaba announced a broad new retail strategic partnership, including full membership integration. Starbucks would use Ele.me’s delivery system for its delivery service.

According to data released in September 2019, within one year of the Starbucks-Ele.me partnership, Zhuanxing Song covered 3,000 stores in 100 cities.

Meituan Waimai had also contacted Starbucks that year in hopes of cooperation. Starbucks ultimately chose Alibaba, which was stronger in the internet sector and offered cooperation beyond food delivery, including Hema, Taobao, Alipay, Tmall and Koubei.

When Starbucks first cooperated with Ele.me, it synchronized 7 million member records with the platform.

For the Meituan Waimai cooperation, the member data pool was close to 18 million. Starbucks’ latest quarterly financial report at the time showed Starbucks China had 17.9 million 90-day active members, with 5,360 stores in 208 cities.

For fiscal 2022, Starbucks China expected to expand to 6,000 stores across 230 cities.

Delivery’s Role in Starbucks China

Starbucks’ mobile ordering business in China was divided into two parts: Mobile Order & Pay for in-store pickup and Zhuanxing Song for delivery. According to the latest financial report cited in the article, mobile orders accounted for 36% of Starbucks China sales, with Zhuanxing Song accounting for 15%.

Starbucks China’s latest fiscal-year revenue was $3.7 billion. FoodBud estimated the Zhuanxing Song business at RMB 3.54 billion.

For Starbucks and Meituan, the partnership offered mutual benefits. Starbucks faced increasingly intense domestic competition and same-store declines. After launching on Meituan, Starbucks could acquire Meituan Waimai users and convert them into active Starbucks members. Starbucks’ financial report showed that 90-day active members contributed more than 70% of its revenue.

Meituan held close to 70% of China’s food-delivery market share. Its delivery rider scale and infrastructure, including pickup lockers, could help Starbucks improve delivery coverage and efficiency.

Note: store-expansion targets and delivery-business estimates are historical figures from the 2022 source article.