Starbucks denied reports that it is considering a complete sell-off of its China business after Chinese media Caixin reported that the company approached over a dozen potential buyers. A Starbucks spokesperson clarified, “We are not currently considering a full sale of our China operations.“
Despite the denial, sources said Starbucks began a formal due diligence process in May, with support from Goldman Sachs. Note-buyers were subjected to detailed questions on company culture, management style, sustainability practices, and strategic fit. While Starbucks said no final decision has yet been made, sources say options included selling either the company’s minority or majority stake, or retaining key sections of the company, including its supply chain.
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Starbucks’ position in China eroded over the last few years, as competition increased from rapidly expanding, lower-priced companies such as Luckin and Cotti Coffee. According to data from Euromonitor International, Starbucks’ market share fell from 34% in 2019 to just 14% in 2024. Meanwhile, consumer behaviour related to coffee is changing, as price-sensitive consumers turn to subsidised coffee options through e-commerce platforms with prices sometimes as low as 5 yuan per cup.
Starbucks’ next move could determine its long-term strategies in a market it once considered its second-largest growth engine.
