Is Starbucks Losing China? The Real Story Behind the $10B Shake-Up
- Fernando Braganca
- Jul 11
- 2 min read
Short answer? No. A Starbucks spokesperson confirmed the company is committed to China and looking for strategic partners with shared values.
According to CNBC, the company is in talks with around 30 potential investors — including global names like KKR, Carlyle, Hillhouse Capital, and Centurium, a firm that already owns a stake in rival Luckin Coffee. The company may retain a 30% stake in its China business, with the remaining shares spread among multiple partners.
Why It Matters Now
China is Starbucks’ second-largest market with 7,594 stores. But after years of growth, things have slowed. In the most recent quarter, sales in China were flat — a significant shift after four straight quarters of declines.
Starbucks' shift isn’t just about money — it's about survival and adaptability.
This move comes as Starbucks faces pressure to revamp its growth strategy. CEO Laxman Narasimhan has been focused on turning things around globally, and China is a key part of that plan.
Local Rivals Are Getting Stronger
Starbucks is facing fierce competition from cheaper Chinese brands like Luckin Coffee and Cotti Coffee, both which have pressured Starbucks’ share to drop from 34% in 2019 to 14% in 2024. These brands offer faster service and lower prices — often backed by strong local tech and delivery ecosystems.
As a result, Starbucks has begun doing something it rarely does: lower prices. In recent months, it cut prices on some items to stay relevant in a more value-driven consumer market.
A Deal Is in the Works — But Not Yet Final
According to reports, bidders could be shortlisted in the next two months, but the deal is unlikely to close before the end of 2025. The partnership could take the shape of a joint venture, similar to how McDonald’s restructured its China operations in 2017.
What This Signals
Starbucks' shift isn’t just about money — it's about survival and adaptability. By partnering with local investors and keeping a meaningful stake, the company aims to stay alive and competitive while gaining better insight into local market dynamics, supply chains, and consumer preferences.
This marks a new era of international business in China, where global companies stay relevant by teaming up rather than going it alone. They seem to have no other option.
