Starbucks China changes ownership, plans to open 12,000 more stores in the future.

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Author | Wang Xiaojuan

Editor | Huang Yu

Another business story of global brands joining hands with local capital is unfolding again.

On November 4th, Starbucks officially announced a strategic partnership with Chinese alternative asset management firm Boyu Capital. The two sides will form a joint venture to jointly operate Starbucks' retail business in the Chinese market.

According to the agreement, Boyu Capital will hold up to 60% of the joint venture, becoming the controlling shareholder, while Starbucks will retain a 40% stake. Starbucks will also continue as the brand and intellectual property owner and licensor, granting licenses to the newly established joint venture.

Based on a joint venture value of about $4 billion (excluding cash and debt), Boyu will acquire the corresponding equity. This means Boyu will invest $2.4 billion in the joint venture, approximately RMB 17.3 billion.

For the first time in 26 years, the global coffee chain giant is transferring controlling rights of its Chinese business. This marks both a self-reform under competitive pressure for Starbucks and a landmark event in China’s consumer investment sector.

The Goal: 20,000 Stores

One key aspect of the joint venture is the expansion of Starbucks' stores.

According to information released by both parties, the new joint venture will continue to be headquartered in Shanghai, managing and operating Starbucks' 8,000 stores in China. The two sides are committed to gradually expanding Starbucks' store count in China to 20,000.

According to Starbucks’ latest financial report, by the end of fiscal year 2025, Starbucks had 8,011 stores in China, covering 1,091 county-level markets. Starbucks opened 415 new stores for the full fiscal year of 2025, including 183 in the fourth quarter alone, and entered 47 new county-level markets.

Although this expansion is not slow, it still seems conservative compared to local brands. With Boyu Capital taking charge in the future, the process may accelerate.

Starbucks estimates the total value of its Chinese retail business to exceed $13 billion.

Reportedly, the total value consists of three parts: the consideration from transferring controlling rights to Boyu, the value of Starbucks’ retained equity in the joint venture, and the ongoing licensing revenue Starbucks will receive over the next ten years or more.

Rumors of the acquisition began circulating in 2024, right as Starbucks’ Chinese performance had started rebounding after a decline. Currently, Starbucks is at a turning point where its global and Chinese market performances are diverging.

Globally, Starbucks faces considerable pressure. In Q4 of fiscal year 2024, global same-store sales fell by 7%, and consolidated net revenue dropped 3% to $9.1 billion. Then-CEO Brian Niccol admitted that the company needs a fundamental strategy shift to restore growth and is now executing a “Back to Starbucks” plan.

In contrast, the Chinese market is showing signs of recovery.

In Q4 of fiscal year 2025, Starbucks China achieved operating income of $831.6 million, a year-over-year increase of 6%, marking four consecutive quarters of growth. For the full year, Starbucks China's revenue reached $3.105 billion, a 5% increase year-over-year, higher than the global average growth rate.

These positive results undoubtedly lay a solid foundation for the current transaction.

For Starbucks, this deal is a strategic adjustment in response to increasingly fierce competition in China.

As early as last year, Starbucks Chairman and CEO Brian Niccol said when discussing the China business: “We need to fundamentally change our strategy to restore growth.”

Globally, Starbucks has advocated a “Back to Starbucks” strategy, but in China, it needs to face fierce competition from local brands such as Luckin and Cotti.

Through this mode of collaboration, Starbucks has achieved a “ready to advance or retreat” strategy. On one hand, Starbucks can obtain a large cash inflow by transferring controlling rights to support global innovation; on the other, by retaining a 40% stake and a long-term licensing fee model, Starbucks can still share in China's future growth dividends.

Why Boyu Became the Winner

After news broke that Starbucks was selling its Chinese business, more than 20 interested capital firms and business giants joined in. According to market reports, private equity firms KKR, FountainVest, PAG, as well as business giants such as Meituan and China Resources, all showed strong interest in Starbucks.

Brian Niccol clearly stated: "Boyu's experience and expertise in the local market will strongly accelerate Starbucks' expansion in China, especially in small and medium-sized cities and emerging regions."

This statement shows that Starbucks realized further expansion in China, especially in lower-tier cities, requires strengthening localization capabilities. Judging by Boyu’s previous investments, it has mature experience in local operations.

Public information shows Boyu Capital was founded in 2011 and is an alternative asset management company deeply rooted in China with a global layout. Alternative asset management refers to assets that are relatively less liquid, more complex, and valued differently compared to traditional assets such as stocks, bonds, and cash equivalents.

Reportedly, Boyu’s portfolio covers more than 200 companies, building a diversified investment management platform across private equity, public markets, infrastructure, and venture capital.

In recent years, its investment focus has been on new technologies and new consumption. Representative projects include J&T Express, NetEase Cloud Music, Mixue Bingcheng, Nio, CATL, etc. Boyu has also deeply participated in Mixue Bingcheng’s supply chain building for lower-tier markets and its ten-thousand-store expansion strategy.

Interestingly, earlier this year Boyu, through its funds, also acquired about 42–45% of the high-end department store Beijing SKP. Its comprehensive layouts in high-end retail and mass-market beverages will allow Boyu, when operating Starbucks, to maintain its original brand style while being able to penetrate lower-tier markets.

According to data from Preqin, Boyu’s historical net internal rate of return for its funds has remained above 25%, well above the Asian PE industry average of 15%. This strong historical performance may be one reason Boyu ultimately won this nine-month bidding battle.

Although the change of ownership has come to an end, Starbucks still faces fierce market competition, ongoing price wars, and a trend toward fragmented market share.

Earlier this year, Starbucks China actively responded. In July, Starbucks unusually reduced prices by 3–6 yuan, with some products priced as low as 25 yuan, resulting in a 12% month-on-month increase in transactions.

This “joint venture for change” approach by Starbucks is not the first case of foreign brands localizing in China. Looking back, partnerships such as McDonald's with CITIC and Coca-Cola with COFCO are representative. With the help of local capital, these global brands have penetrated more deeply into Chinese consumers' daily lives.

With this change of ownership, Starbucks China officially enters the 2.0 era. Starbucks China CEO Liu Wenjuan commented: “Given the current healthy momentum of Starbucks China, our strong partnership with Boyu will further help us unlock massive market potential.”

In the future, Starbucks may not only be a provider of a "third space," but will move toward a multi-dimensional model, heading for 20,000 stores in many forms.

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