2 1 Shi Ji Jing Ji Bao Dao·2025-11-03 23:20Core Viewpoint - Starbucks has finalized a strategic partnership with Chinese alternative asset management company Boyu Capital, forming a joint venture to operate Starbucks' retail business in China, with Boyu holding up to 60% equity and Starbucks retaining 40% [1][2]. Group 1: Joint Venture Details - The joint venture will be headquartered in Shanghai and manage approximately 8,000 Starbucks stores across China, with plans to expand to 20,000 stores in the future [1]. - The enterprise value of the joint venture is estimated at around $4 billion, excluding cash and debt, with Starbucks' total retail business in China valued at over $13 billion [1][4]. - Starbucks will continue to own the brand and intellectual property rights, licensing them to the new joint venture [1]. Group 2: Market Position and Growth Potential - Starbucks' CEO Brian Niccol emphasized that Boyu's local market expertise will accelerate Starbucks' expansion, particularly in smaller cities and emerging regions [2]. - Boyu's investment reflects a recognition of Starbucks' potential for further localization and operational improvement in China [3]. - The deal positions Starbucks favorably in negotiations, as the company's Chinese business valuation has exceeded initial expectations [5]. Group 3: Financial Performance - For the fourth quarter of fiscal year 2025, Starbucks China reported a revenue increase of 6% year-over-year to $831.6 million, with a full-year revenue growth of 5% to $3.105 billion [6]. - The operating profit margin for Starbucks China remains in double digits, with profits and margins improving for four consecutive quarters [7]. Group 4: Strategic Changes and Market Dynamics - Starbucks has implemented price adjustments and promotional activities to drive growth, including a price reduction on key products starting June 10 [8][9]. - The company has also expanded its delivery services, achieving record sales in its delivery business [9]. - Despite these efforts, Starbucks faces increasing competition from domestic brands like Luckin Coffee, which has significantly expanded its store count and revenue [12][13]. Group 5: Cultural and Operational Considerations - The shift towards a joint venture indicates a move towards greater localization in operations, allowing for more autonomy within the Chinese team [11]. - However, there are concerns about maintaining Starbucks' cultural identity and operational standards during this localization process [15][16].