Starbucks is shifting how it operates in China, agreeing to sell a majority stake in its Chinese business to Boyu Capital in a deal valued around $4 billion. The company will keep a 40 percent stake and continue licensing its brand, while Boyu takes over day-to-day control. With nearly 8,000 stores, China has been Starbucks’ second-largest market, but competition has intensified quickly.
Local chains such as Luckin Coffee have expanded aggressively with lower prices and localized flavors, reshaping consumer habits. Starbucks had struggled to maintain growth and store profitability, leading to pressure to rethink its structure in China. Letting a local partner handle operations gives Starbucks a way to stay present while reducing its exposure to a market that moves faster than its traditional model.
The agreement reflects a broader trend for Western brands operating in China. Instead of full ownership, companies now look for partnerships that bring deeper insight into local tastes and supply chains. Boyu Capital has experience helping global consumer brands adapt to China, and the deal suggests Starbucks wants to remain relevant rather than retreat.
This move also frees Starbucks to concentrate elsewhere. By stepping back operationally but keeping its brand influence and royalty income, it preserves long-term upside. The real test will be whether the Boyu-led business can stabilize store performance and reconnect with younger Chinese consumers who have many coffee options just around the corner.
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