Starbucks Reboots China Strategy With $4 Billion Boyu Capital Partnership

The Deal With Boyu Capital Aims to Expand Starbucks’ Retail Stores in China to 20,000 Locations

Starbucks has announced a $4 billion joint venture with Boyu Capital, selling a majority stake in its China business to strengthen its foothold in the fast-growing Asian market. This bold move to balance local expertise will improve efficiency, profitability, and regional adaptability, according to market analysts.

Starbucks-Boyu Capital Partnership
 

According to the agreement, Boyu will acquire a 60% interest in Starbucks’ retail operations in China, which is valued at $4 billion. Starbucks will retain a 40% interest in the joint venture and will own and license the Starbucks brand.

The deal, which is expected to be finalized in the second quarter of 2026, comes amidst the rapid expansion of Chinese competitors such as Luckin Coffee and Cotti Coffee.

Boyu Capital Partner Alex Wong said, “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.

Reason Behind this Partnership
 

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, “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.”

“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.

McDonald’s and Yum Brands both entered similar joint-venture arrangements in the past decade, then used local partners to accelerate store growth across China.

Other Ventures of Starbucks in China

Starbucks has invested largely in green coffee production in China’s Yunnan region. The coffee-maker has also promoted roasted coffee production and distribution across the country. The company opened its first farmer-support center in Yunnan in 2012 and opened a $220 million roasting plant outside of Shanghai in 2023.

Starbucks said its business in China will have a total value of more than $13 billion, including the proceeds from the sale of the controlling interest to Boyu, the value of its 40% stake, and the value of its royalties.

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 stores.