Why Starbucks Isn’t Selling Its Whole China Business — But Still Wants Help

Photo by THE CHINA NOW

Starbucks is looking for partners in China to help it stay competitive, not planning a full exit. As cheaper rivals grow fast, the coffee giant is rethinking how it operates in its second-largest market.

Starbucks Isn’t Leaving China

Despite recent rumors, Starbucks has confirmed it is not planning to sell all of its China operations. The confusion began after a report from Chinese media suggested a full sale was underway.

What Starbucks is doing, however, is talking to investors about selling a stake in the business — possibly a minority or even a controlling share.

The company hasn’t made a final decision yet. It may keep parts of the business, like its supply chain and its large roasting plant near Shanghai.

The Reason: China’s Coffee War

Starbucks is facing intense pressure from local coffee brands like Luckin and Cotti, which are growing fast and offering coffee at much lower prices.

Starbucks has nearly 7,800 stores in China and plans to open 9,000 by 2025. It’s the company’s second-largest market in the world, after the U.S.

Today, customers in China can often get a cup of coffee delivered for less than ¥5 (about $0.70), thanks to discounts and coupons from e-commerce platforms.

That makes it harder to justify Starbucks’ prices of around ¥30 per cup (about $4.18). As a result, Starbucks’ market share in China has dropped from 34% in 2019 to just 14% in 2024.

Looking for the Right Partner

To adapt, Starbucks is looking for a partner who can help the brand stay strong in a fast-changing market.

More than 20 potential investors have shown interest. The company is working with Goldman Sachs to ask them questions about their business plans, culture, and management style before deciding who to move forward with.

According to insiders, the goal is to find someone who can bring local expertise, not just money.

China Still Matters a Lot

Starbucks has nearly 7,800 stores in China and plans to open 9,000 by 2025. It’s the company’s second-largest market in the world, after the U.S.

That’s why the company is being careful. Rather than pulling out, Starbucks is looking for a partner who can help it grow, compete with local brands, and stay relevant to Chinese consumers.

What Happens Next?

Starbucks is expected to shortlist potential partners soon and move into deeper talks.

This isn’t an exit — it’s a reset. The company knows it needs to move faster, be more affordable, and localize better in China. A strategic partner may be key to that future.