Starbucks announced on November 3, 2025, that it will sell a majority stake in its China operations to Boyu Capital for $4 billion. This move forms a joint venture where Boyu takes up to 60 percent control, amid fierce competition from local chains like Luckin and Cotti.
Deal Details and Structure
The agreement creates a joint venture for Starbucks’ retail business in China. Boyu Capital, a Hong Kong-based investment firm, will hold the controlling interest.
Starbucks keeps a 40 percent stake and continues to own the brand and intellectual property. The company will license these to the new entity.
This setup allows Starbucks to benefit from future growth without full operational control. Analysts see it as a strategic retreat to focus on core strengths.
The deal values the China unit at $4 billion. Combined with retained stake and licensing fees over 10 years, Starbucks expects over $13 billion in total value.
Reasons Behind the Sale
Starbucks entered China in 1999 and built a strong presence with premium coffee. But recent years brought challenges from local competitors offering cheaper options.
Luckin Coffee now leads with over 20,000 stores, focusing on takeaway and delivery. Cotti and other chains have also gained ground with lower prices.
China’s economic slowdown has made consumers more price-sensitive. Starbucks’ market share dropped from 34 percent in 2019 to 14 percent last year.
The company has about 8,000 stores in China, which is over a fifth of its global total. Sales have plummeted due to these pressures.
Starbucks tried cutting prices on some drinks and adding local products. Yet, experts say avoiding a full price war is key to maintaining its upscale image.
Impact on Starbucks and Investors
Shares rose about 3 percent in after-hours trading after the announcement. This shows investor confidence in the strategy.
The sale is one of the largest divestments of a China unit by a global consumer firm in recent years. It highlights shifting dynamics in the market.
Starbucks aims to use proceeds to strengthen other areas. The deal could help improve overall fortunes amid global challenges.
- Expected Financial Gains: Over $13 billion from sale, stake, and licensing.
- Store Count Comparison: Starbucks has 8,000 in China; Luckin has over 20,000.
- Market Share Shift: From 34% in 2019 to 14% now.
Broader Market Context
China’s coffee market has grown rapidly, thanks in part to Starbucks. But local brands now dominate with value-driven models.
Other Western firms have faced similar issues. For example, fast-food chains have adjusted strategies due to competition and economic factors.
This deal follows reports from earlier in 2025 about Starbucks considering a full exit. It reflects a trend of global companies partnering locally for better navigation.
Boyu Capital brings expertise in China investments. Backed by major banks, the firm could drive expansion in the joint venture.
Future Outlook for Starbucks in China
The joint venture plans rapid growth. With Boyu’s involvement, operations might adapt more to local tastes.
Starbucks will still influence through its stake and branding. This could preserve its premium positioning without daily management burdens.
Challenges remain, like economic recovery and competition. Success depends on balancing affordability with quality.
| Key Competitors | Store Count | Focus Areas |
|---|---|---|
| Luckin Coffee | 20,000+ | Takeaway, delivery, low prices |
| Cotti Coffee | Growing rapidly | Affordable options, local appeal |
| Starbucks (pre-deal) | 8,000 | Premium experience, sit-in cafes |
Analysts predict this could stabilize Starbucks’ position. It avoids deeper losses while tapping into China’s potential.
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