Source: OT-Team(G), 新浪财经
According to reports, Starbucks plans to sell its China business by the end of October.
Major investment firms — including The Carlyle Group, EQT, HongShan Capital (formerly Sequoia China), and Boyu Capital — are preparing final bids for a controlling stake. Sources say Starbucks has asked bidders to submit binding offers in early October, with a final agreement expected later this month. Chinese private equity firm Primavera Capital is also among the finalists and may team up with co-investors for the acquisition.
Why Is Starbucks Selling Its China Business?
Media analyses suggest several key reasons behind Starbucks' decision to sell its China operations:
1. Intense market competition
Shanghai alone now hosts nearly 10,000 coffee shops, with Starbucks accounting for about 1,300 — a level of saturation that leaves little room for growth.
2. Consumer spending slowdown
Affordable domestic rivals such as Luckin Coffee (RMB 9.9), Cotti Coffee (RMB 8.8), and Lucky Cup (as low as RMB 4) have captured price-sensitive consumers. As a result, fewer people are willing to spend over RMB 30 on a Starbucks drink. The brand's market share has tumbled from around 60% to just 14%.
3. The broader retreat of foreign brands
Amid rising local competition and tighter capital conditions, several foreign consumer brands — including Häagen-Dazs and McDonald's — have been scaling back their China operations.
Valuation and Deal Structure
Media reports last month indicated that Starbucks had invited around 10 potential buyers to submit non-binding offers in early September. Most of those offers reportedly valued Starbucks' China business at approximately USD 5 billion.
Starbucks has agreed to sell a controlling stake but will retain ownership of its coffee bean roasting facilities to maintain quality control. The exact terms of the deal — including the percentage of shares to be sold — remain under negotiation.
A Starbucks spokesperson pointed to the company's latest quarterly earnings report, which showed record international sales growth and a third consecutive quarter of revenue increase in China. However, the potential sale comes as the company faces mounting pressure in a market that accounts for more than 20% of its global store footprint.
According to Euromonitor International, Starbucks' market share in China has plunged from 34% last year to just 14% this year, amid fierce competition from homegrown brands. To address these challenges, Starbucks has recently lowered prices on selected non-coffee beverages and accelerated the rollout of localized menu items. For the quarter ending June 29, same-store sales in China rose 2%, compared with flat growth in the previous quarter.
From Franchising to Full Ownership
Starbucks entered China in 1999 through regional licensing partners in North, East, and South China. It began reclaiming these licenses in 2003 and, by 2017, had fully taken control of 1,477 East China stores, bringing all its outlets under direct operation — 3,521 in total, with a 42% market share. That year, China overtook Japan as Starbucks' largest market outside the U.S.
By fiscal year 2024, Starbucks operated 7,594 company-owned stores in China, rising to 7,828 by June 2025 — about one-fifth of its global total.
Analysts note that while full ownership ensures consistent service and agility, it also brings higher costs. Directly operated stores contribute full retail revenue but must absorb expenses such as materials, labor, operations, depreciation, and restructuring.
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