Starbucks has firmly denied reports suggesting it is preparing to sell its entire China business, emphasizing that a full sale is not under consideration at this time. The clarification comes in response to speculation published by Chinese financial outlet Caixin, which hinted at the possibility of the U.S. coffee giant offloading its entire stake in the region. Starbucks has instead confirmed that it is conducting a strategic review of its operations in China and exploring options that could include a partial stake sale.
The company’s spokesperson stated that Starbucks remains committed to its long-term presence in China, its second-largest market after the United States. While it acknowledged engaging financial advisors, including Goldman Sachs, to evaluate potential strategic partnerships or investments, the company stressed that the process does not currently involve a full divestment.
Starbucks has reportedly reached out to more than 20 investment firms and strategic investors since May, including prominent names like KKR, PAG, Hillhouse, FountainVest, Trustar, China Resources, and JD.com. These discussions range from minority stake sales to broader partnership models, as the company considers ways to boost performance in an increasingly competitive Chinese coffee market.
The review comes amid a significant decline in Starbucks’ market share in China, which has dropped from 34 percent in 2019 to around 14 percent in 2024. Despite opening more than 7,700 stores in China and targeting 9,000 locations by the end of 2025, Starbucks’ revenue in the country has remained stagnant at approximately \$3 billion.
Competition from local brands like Luckin Coffee and Cotti Coffee has intensified in recent years, with these companies leveraging aggressive pricing strategies and online delivery platforms. As a response, Starbucks implemented its first-ever price cuts in China earlier this month, slashing prices of some iced and tea-based beverages by about 5 yuan to stay competitive and retain customer loyalty.
In addition to price adjustments, Starbucks is also investing in innovation to revitalize its brand appeal. Its Kunshan Coffee Innovation Park, opened in 2023, continues to serve as a central hub for supply chain efficiency. The company is also focused on enhancing in-store experiences and developing locally tailored products to regain momentum in the market.
Analysts estimate the value of Starbucks’ China business at around \$6 billion, though reports suggest the company may seek valuations closer to \$9 billion. The strategic review has no fixed timeline, and company executives, including CEO Laxman Narasimhan, have indicated that the process will be deliberate and open-ended, ensuring that any future decision aligns with Starbucks’ global strategy.
The outcome of this strategic evaluation could redefine Starbucks’ approach in China. However, the company remains committed to retaining a meaningful stake in its Chinese operations while considering the benefits of outside investment to support its turnaround plans.
As Starbucks navigates challenges in both its China and North American markets, the ongoing review is viewed as a pivotal step in ensuring sustainable growth and adapting to shifting consumer dynamics in one of the world’s most crucial coffee markets.