Starbucks Corp said on Monday it is forming a joint venture with Chinese investment firm Boyu Capital (博裕資本) to operate Starbucks stores in China.
Under the agreement, Boyu will acquire a 60 percent interest in Starbucks’ retail operations in China, which is valued at US$4 billion. Starbucks will retain a 40 percent interest in the joint venture and will own and license the Starbucks brand.
Starbucks said its business in China will have a total value of more than US$13 billion, including the proceeds from the sale of the controlling interest to Boyu, the value of its 40 percent stake and the value of its royalties.
Photo: Hector Retamal, AFP
Starbucks entered China almost 30 years ago, and has been credited with growing coffee culture in the country. China is Starbucks’ second-largest market outside the US, with 8,000 locations.
But in recent years, the Seattle coffee giant has struggled in China with cheap, fast-growing Chinese start-ups like Luckin Coffee Inc (瑞幸咖啡). Starbucks’ same-store sales in China have fallen in both of its last two fiscal years.
As a result, Starbucks has been looking for a partner to help it grow its business in China, particularly in smaller cities. In July, Starbucks chairman and CEO Brian Niccol said the company was evaluating around 20 offers for a stake in the company.
Niccol said on Monday that Boyu shares Starbucks’ commitment to providing a great experience for both customers and employees. It will also help Starbucks achieve its goal of growing to 20,000 stores in China over time, Niccol said.
“Boyu’s deep local knowledge and expertise will help accelerate our growth in China, especially as we expand into smaller cities and new regions,” Niccol said in a statement.
Boyu Capital partner Alex Wong (黃宇錚) said Starbucks has built a deep connection with Chinese consumers over nearly three decades.
“This partnership reflects our shared belief in the enduring strength of that brand and the opportunity to bring even greater innovation and local relevance to customers across China,” Wong said in a statement.
Starbucks’ China headquarters will remain in Shanghai. Boyu Capital, which was founded in 2011, has offices in Shanghai, Hong Kong, Singapore and Beijing.
The companies said they expect to finalize the deal in the second quarter of Starbucks’ 2026 fiscal year. Starbucks’ 2026 fiscal year began on Sept. 29.
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