Core Viewpoint - Starbucks has entered a strategic partnership with Boyu Capital to establish a joint venture for its retail operations in China, marking a significant shift in its business strategy in the Chinese coffee market [2][4][5]. Group 1: Business Transition - Starbucks will receive approximately $4 billion from Boyu Capital for a stake of no more than 60% in the joint venture [5]. - This partnership signifies a transition from Starbucks being a dominant player with a 42% market share to a more collaborative approach in a rapidly evolving market [7][16]. - The move reflects a broader trend of foreign brands adapting to local market dynamics, as evidenced by Starbucks' historical presence in China since 1999 [11][12]. Group 2: Market Dynamics - The Chinese coffee market is projected to exceed 240 billion yuan by 2025 and reach 500 billion yuan by 2030, indicating significant growth potential [81]. - The competitive landscape has shifted, with local brands like Luckin Coffee and Kudi Coffee gaining substantial market share, highlighting a change in consumer preferences towards more affordable options [23][37]. - Starbucks' market share has declined, with Luckin Coffee capturing 35% and Kudi Coffee at 18%, while Starbucks' share has diminished [23][24]. Group 3: Strategic Challenges - Starbucks has faced declining growth rates since 2017, exacerbated by aggressive pricing strategies from competitors [19][20]. - The company's operating profit margin has decreased from 26.6% to 19%, and same-store sales have dropped by 2% [21]. - Rising coffee bean costs and increased competition have pressured Starbucks' profitability, leading to a 50.6% decline in net profit [66]. Group 4: Future Outlook - The partnership with Boyu Capital aims to expand Starbucks' store count from 8,000 to 20,000, focusing on underdeveloped markets [79]. - Boyu Capital's expertise in supply chain management and local market knowledge is expected to enhance Starbucks' operational efficiency and cost control [60][63]. - The shift in Starbucks' strategy indicates a move towards a more localized approach, aligning with the evolving consumer mindset that views coffee as a daily necessity rather than a luxury [86][90].
星巴克中国改姓“中”，中国咖啡如何从“西风东渐”到“东风自立”|咖啡观察②