Zhong Guo Jing Ying Bao·2025-09-16 13:26Core Viewpoint - Starbucks is in the final bidding stage for the sale of its China business, with results expected by the end of October 2023, as interest from over 20 institutions has been expressed [1][2] Group 1: Investment Interest and Bidders - A consortium including Boyu Capital, Carlyle Group, Sequoia China, Springhill Capital, and EQT has reached the final round of bidding for Starbucks China [1] - Starbucks CEO Brian Niccol mentioned that the company is looking for a strategic partner that aligns with its values, with over 20 interested parties [1][2] - Notable bidders have strong investment records in the consumer sector, with Sequoia China and Boyu Capital having made significant investments in various brands [3] Group 2: Financial Performance and Market Context - In Q2 2025, Starbucks China generated $790 million in revenue, accounting for approximately 8% of total revenue and nearly 40% of international revenue outside North America [1] - Starbucks China had previously indicated intentions to adjust its business strategy in the region, with revenue growth of 5% and 8% in the first two quarters of 2023 [2] - The competitive landscape in the Chinese coffee market has intensified, with local brands like Luckin Coffee and Kudi Coffee gaining market share through lower-priced products [4] Group 3: Strategic Considerations - Retaining a stake in the China business may help maintain Starbucks' brand valuation and market appeal, as complete divestment could signal a lack of confidence in the market [1][5] - Starbucks aims to preserve control over product quality and brand image by not fully transferring operational control to franchisees [5] - The company is focusing on expanding its presence in lower-tier cities and optimizing its store expansion strategy [8] Group 4: Market Trends and Consumer Behavior - The coffee market in China has seen significant investment activity, with nearly 60 financing events from 2021 to 2023, although investment enthusiasm has waned in the latter half of 2023 [3] - Starbucks is exploring new retail channels and community engagement through partnerships, such as with Xiaohongshu, to create themed community spaces in its stores [8][9] - The company is adapting its definition of "community" to include online interest-based groups, aiming to attract younger consumers [9]