Starbucks Partners with Boyu Capital to Expand in China: What This Means for the Coffee Giant

Starbucks has entered into a joint venture with Boyu Capital, investing USD 4 billion to enhance its operations in China. This partnership aims to accelerate growth, particularly in smaller cities, as Starbucks faces increasing competition from local startups. With a goal of expanding to 20,000 stores, this collaboration reflects a strategic move to strengthen its presence in the Chinese market. The deal is expected to be finalized in the second quarter of Starbucks' fiscal year 2026, marking a significant step in the coffee giant's journey in China.

By Narendra Chaudhary Nov 4, 2025, 11:07 IST

Starbucks Forms Joint Venture in China

Seattle: Starbucks has announced a strategic partnership with Boyu Capital, a Chinese investment firm, to manage its stores in China. As part of this agreement, Boyu will invest USD 4 billion to acquire a 60% stake in Starbucks' retail operations within the country.

Starbucks will maintain a 40% stake in this joint venture and will continue to own and license its brand.

Having entered the Chinese market nearly three decades ago, Starbucks has played a significant role in popularizing coffee culture there. Currently, China stands as Starbucks' second-largest market outside the United States, boasting around 8,000 locations.

However, the coffee chain has faced challenges in recent years due to the rise of budget-friendly competitors like Luckin Coffee. Consequently, Starbucks has reported declines in same-store sales in China for the past two fiscal years.

In light of these challenges, Starbucks has sought a partner to enhance its growth, particularly in smaller cities. In July, CEO Brian Niccol mentioned that the company was considering approximately 20 proposals for a stake in its operations.

Niccol expressed confidence that Boyu shares Starbucks' dedication to delivering exceptional experiences for customers and employees alike. He also noted that this partnership would support the company's ambitious goal of expanding to 20,000 stores in China over time.

According to Niccol, "Boyu's extensive local expertise will significantly boost our growth in China, especially as we venture into smaller cities and new regions."

Boyu Capital Partner Alex Wong highlighted Starbucks' strong connection with Chinese consumers developed over nearly 30 years.

"This collaboration underscores our mutual belief in the enduring strength of the Starbucks brand and the potential to introduce even more innovation and local relevance for customers throughout China," Wong stated.

Starbucks will continue to operate its China headquarters from Shanghai. Boyu Capital, established in 2011, has offices in Shanghai, Hong Kong, Singapore, and Beijing.

The companies anticipate finalizing the agreement in the second quarter of Starbucks' fiscal year 2026, which commenced in September.