Starbucks has agreed to sell a 60% stake in its China business to Boyu Capital for around $4 billion, retaining 40% ownership and continuing to control the Starbucks brand in the country.
Since entering China in 1999, Starbucks has grown the market to become its second largest, but has faced increasing competition from local rivals like Luckin Coffee. The Chinese operation, based in Shanghai, currently runs about 8,000 stores, with plans to expand to 20,000.
CEO Brian Niccol described the deal as a key step for long-term growth, valuing Starbucks’ China retail business at $13 billion. The partnership aims to combine Starbucks’ global brand and coffee expertise with Boyu’s deep knowledge of Chinese consumers, with plans to launch new drinks and digital services. The agreement is expected to be completed in 2026.
Boyu Capital is a private equity firm investing across Asia, reinforcing Starbucks’ strategy to localise and strengthen its position in China’s competitive market.
Starbucks’ future in China had been uncertain after former CEO Laxman Narasimhan spoke of exploring “strategic partnerships” amid tough market conditions. The deal marks a major global consumer brand agreement in recent years, following similar challenges faced by companies like Yum! Brands, Gap, and Uber in China.
Luckin Coffee now has more outlets than Starbucks in China, attracting customers with lower prices and frequent discounts. Starbucks has reduced its prices in response, affecting profits.
Since Brian Niccol became CEO last year, he has led efforts to refresh the menu and increase barista staffing, reducing automation.
Globally, Starbucks operates over 40,000 stores, but this restructuring in China signals its commitment to adapt and grow in a critical market.