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Yuke Xie

Starbucks has denied reports that it is in talks with private equity firms to sell the entirety of its China operations, as it faces slowing sales and intensifying competition from domestic rivals.
“We have a world-class team in China, and a strong brand,” the Seattle-based coffee chain said in a statement on Tuesday. “We see significant long-term potential in the market and are evaluating the best ways to capture the future growth opportunities.”
The statement came after local media outlet Caixin Global reported on Monday, citing sources, that Starbucks was weighing the sale of its China unit, drawing potential buyers including Hillhouse Investment and Trustar Capital, the private equity affiliate of McDonald’s China owner Citic Capital.
Starbucks began approaching private equity firms about a possible stake sale in May, according to a Bloomberg report.

Starbucks shares rose less than 1 per cent in after-hours trading in New York, closing at US$92.34. The shares have fallen nearly 20 per cent from a peak in March.
“A potential spin-off is primarily driven by management needs at the corporate level,” said Richard Lin, chief consumer analyst at SPDB International, a Hong Kong-based investment bank. “With China entities functioning entirely on their own under licensing agreements, the structure helps to reduce the financial pressure of global parents while allowing for more operational flexibility at the regional level.”
Once China’s largest coffee purveyor, Starbucks was embraced by consumers for its premium label. However, it has been rapidly losing ground to domestic challengers known for their efficient models and affordable menus.
Beijing-based Luckin overtook Starbucks in annual China sales in 2023, while Cotti Coffee, which ignited an industry-wide price war with its 9.9 yuan (US$1.40) beverages, surpassed the US chain in market share last year.
Luckin, Cotti and Starbucks held market shares of 11, 4.4 and 4.2 per cent, respectively, on the mainland in 2024, according to Caixin.
Starbucks’ second-quarter same-store sales in China were flat compared with a year earlier after falling for four consecutive quarters. Net revenue rose 5 per cent year on year to US$739.7 million, accounting for 8 per cent of the global total.
Starbucks’ China store count increased 9 per cent to 7,758, according to its latest financial report. Luckin, which relies on a franchise-based expansion model, operated 22,289 stores across China as of December 2024.
Since current CEO Brian Niccol took charge in September, Starbucks has introduced a series of changes aimed at winning back consumers. This month, it announced its first-ever price cut in China, lowering prices of iced drinks like Frappuccinos and chai lattes by an average of 5 yuan.
The company also appointed its first chief growth officer in the country in November to collaborate with brands and celebrities, with the goal of connecting with younger drinkers.


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‘We see significant long-term potential … and are evaluating the best ways to capture the future growth opportunities,’ coffee chain says


‘We see significant long-term potential … and are evaluating the best ways to capture the future growth opportunities,’ coffee chain says.


Starbucks denies it is considering a full sale of its China operations

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}‘We see significant long-term potential … and are evaluating the best ways to capture the future growth opportunities,’ coffee chain says

‘We see significant long-term potential … and are evaluating the best ways to capture the future growth opportunities,’ coffee chain says