As part of a $4 billion (£3.04 billion) agreement with investment company Boyu Capital, Starbucks said it is selling a 60% share in its Chinese business. According to the agreement, the largest coffee chain in the world would hold the Starbucks name in China and own 40% of the retail business there.
Although China is currently Starbucks’ second-largest market outside the US, the company has recently faced difficulties due to the emergence of domestic brands like Luckin Coffee. Starbucks first opened shop in China in 1999. The company announced on Monday that it will maintain its Shanghai headquarters and own and run 8,000 stores in the Chinese market, with aspirations to expand to 20,000 locations.
The relationship involves “combining Starbucks internationally recognized brand, coffee knowledge, and partner (employee)-centred culture with Boyu’s depth of understanding of Chinese consumers,” said the statement. Starbucks stated that it will finalize the agreement next year and wants to launch new beverages and digital platforms in China.
A private equity firm, Boyu Capital, invests in companies across the retail, financial services, and technology sectors. The business maintains offices around Asia, notably in Singapore, Hong Kong, and Shanghai.
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