Starbucks Forms Joint Venture with Boyu Capital to Expand China Operations
Starbucks announced today it is forming a joint venture with Boyu Capital to operate its locations in China, a move intended to accelerate growth in a crucial but increasingly competitive market.
Under the agreement, Boyu Capital, an alternative asset management firm, will invest approximately $4 billion for up to a 60% stake in the new venture. Starbucks will retain a 40% ownership and continue to license its brand and intellectual property. The company values its China business at over $13 billion, encompassing the stake sale, retained interest, and future licensing fees. This strategic shift comes as Starbucks navigates a challenging landscape in China, facing increased competition from domestic brands like Luckin Coffee.
The partnership follows a months-long review of strategic options and aims to capitalize on China’s significant market potential. “Building on our positive business momentum, our partnership with Boyu will enable Starbucks China to fully unlock the vast market opportunity,” stated Molly Liu, CEO of Starbucks China. Despite recent headwinds, including pandemic-related restrictions and rising competition, Starbucks reported a 2% increase in same-store sales in China during its fiscal fourth quarter, driven by a 9% rise in customer traffic – though average ticket prices have decreased due to discounting. You can learn more about Starbucks’ global store count on Statista.
The deal, pending regulatory approval, is expected to close in the second quarter of fiscal 2026. Starbucks first entered the Chinese market in 1999 and has grown to operate roughly 8,000 stores nationwide, but executives have expressed ambitions to potentially expand to 20,000 or 30,000 locations. This move mirrors other companies’ strategies in China, with some, like Burger King’s parent company, seeking to offload operations, while others, such as McDonald’s, are increasing their investment. For more on the economic climate in China, see the Council on Foreign Relations’ China page.
Company officials stated they anticipate working closely with Boyu Capital to finalize the details and secure the necessary approvals for the joint venture.
