China: Starbucks has announced it will sell a 60 percent stake in its China operations to investment firm Boyu Capital in a deal worth $4 billion (£3.04 billion).
The coffee giant will retain a 40 percent share in the business and continue to own the Starbucks brand in China. The agreement values Starbucks’ retail operations in the country at $13 billion and is expected to be completed next year.
China is Starbucks’ second-largest market after the United States. The company first entered the country in 1999 and now operates around 8,000 stores. Despite its strong presence, Starbucks has struggled in recent years with rising competition from local brands like Luckin Coffee, slower consumer spending and the effects of the Covid-19 pandemic. Luckin Coffee has already surpassed Starbucks in the number of outlets, attracting customers with lower prices and frequent discounts.
Starbucks says the partnership with Boyu Capital marks a significant milestone and signals a renewed focus on long-term growth. The business will remain headquartered in Shanghai and plans to expand from 8,000 to as many as 20,000 stores in the coming years. The company also plans to roll out new beverages, digital platforms and technology upgrades tailored for Chinese consumers.
The deal comes after months of uncertainty about Starbucks’ future in China. Former CEO Laxman Narasimhan had previously said the company was exploring strategic partnerships to stay competitive. Other major Western brands have also faced challenges in the Chinese market. Yum! Brands spun off its KFC and Pizza Hut businesses in China in 2016, while companies like Gap and Uber have also struggled to maintain growth.
Since taking over as CEO last year, Brian Niccol has been pushing to revive Starbucks globally. The former Chipotle chief has introduced menu changes, reduced reliance on automation and prioritised hiring more baristas. Starbucks currently operates more than 40,000 stores worldwide.
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