Coffee retailer Starbucks has announced that it has formed a partnership with Alibaba to deliver its coffee and explore new retail business in China. The two will roll out a delivery service as soon as next month. This comes as Starbucks sales in the market have begun to show signs of fatigue. Mi Jiayi has more.

Alibaba and Starbucks have announced that they will work together on Alibaba's retail business platforms, including Ele.me, Hema, Tmall, Taobao and Alipay. The pair plan a pilot coffee delivery service starting next month in Shanghai and Beijing, with a view to expanding nationwide next year. In addition to the delivery service, the two will also set up "Starbucks Delivery Kitchens" in Alibaba's Hema stores, the first time the US company will brew coffee outside its own shops.

BELINDA WONG CEO, STARBUCKS CHINA "Next we're developing a first of its kind virtual Starbucks store Powered by Alibaba's world class technology big data and Omni channel and market capabilities to enhance and to an experience including membership integration."

Discussion of the partnership started a year ago. Planning included how long deliveries will take, the menu available, packaging and even special recipes for the coffee to be used in the delivery service.

WANG LEI CEO, ELE.ME "We will work with Starbucks shops to figure out which orders go to which shops, depending on which shops are busy and which are available to fill orders. Other issues considered were what to make first, cold drinks or hot drinks? And how to integrate the membership of both brands? These are not easy to decide."

So what do customers think about this new collaboration? We've been asking around.

"I wonder if there's any discounts or whether the new service charges delivery fees. When I'm not so busy at work, I'd enjoy strolling down to the coffee shop, but when I'm busy, I just make my own or order delivery."

"I'm not going to order delivery because I enjoy the process of walking to the store and having a cup inside. That's a good little workout too."

MI JIAYI REPORTER "Many view this partnership as an accelerated move from Starbucks to handle the increasing competition in China, the company is facing its first slow down in nine years in the China market."

Starbucks' latest quarterly financial report shows that its same-store sales were down 2 percent from the same period last year. On the other hand, coffee delivery service Luckin has now become the second biggest coffee retail chain in China after just eight months of operation, opening more than 800 stores. Just how important is delivery service to the coffee business?

CHEN QI SENIOR ANALYST, CBNDATA "It's more than just a new service. It's expanding the area the coffee shop covers. Usually people are comfortable walking to stores within 500 meters to buy coffee. But delivery can expand that service area to two kilometers, which expands the area it covers by 16 times. This makes the coffee shops much more competitive."

Data from CBN show that 15 million Chinese customers placed orders for coffee online in 2017, and that number is expected to exceed 20 million this year. MJY, ICS FOR CGTN, SH.