Starbucks Sells 60% China Arm to Boyu in Bold Market Move

In a major shake-up, Starbucks has decided to sell up to 60% of its China operations to local private equity firm Boyu Capital, signaling a renewed push to reclaim its footing in one of the world’s fastest-growing coffee markets.

The move, announced on Monday, brings in a strong local partner with deep experience in China’s fast-moving beverage industry. For Starbucks, which plans to triple its presence to 20,000 stores across the country, the deal marks a strategic shift from full control to shared command — a step many see as necessary to win back customers and adapt to local tastes.

Boyu Capital, already a major investor in budget beverage leader Mixue Group, also operates Lucky Cup, a wallet-friendly coffee brand where drinks start at just RMB 6 ($0.84). With plans to open 10,000 stores by the end of next year, Boyu is betting on both ends of the coffee spectrum — the affordable and the premium.

Starbucks’ market share in China has slipped sharply — from 34% in 2019 to just 14% last year, according to Euromonitor data. Analysts say the company has struggled to keep pace with nimble local players like Luckin Coffee and Yum China’s KCOFFEE, both of which have rapidly expanded through lower prices and localized menus.

Boyu’s local connections could also give Starbucks a real estate edge, particularly in China’s smaller cities, where mall development has sometimes left Starbucks outlets in underperforming areas. The partnership is expected to help the brand secure more prime retail spaces and tap into new consumer clusters.

While Starbucks strengthens its China strategy, the U.S. chain is also refocusing on its home market, where CEO Brian Niccol is leading an operational overhaul. The company’s shares have fallen nearly 20% over the past year, even as the broader market gained.

For Starbucks, the Boyu partnership is more than just a financial transaction — it’s a calculated effort to reset its identity in China. As competition heats up and consumer preferences evolve, the world’s biggest coffee brand is betting that local expertise might just be the ingredient it needs to brew a comeback.