Last week Starbucks
partnered with Alibaba
to expand into the coffee delivery space and boost digital distribution in the fastest growing market for coffee: China.
Starbucks’ had a mixed showing this quarter, where the company was able to beat expectations on revenue and earnings, but performed poorly in China
. China is a critical driver for long term growth for the company as it is the fastest growing market for coffee sales. Currently, China’s consumption per capita stands at around a half cup per year, which is 600 percent lower than the United States per capita coffee consumption. If Chinese consumption inches up by just a fraction of where the United States presently stands, Starbucks will see many promising fiscal quarters to come.