Starbucks has announced a groundbreaking $4 billion deal with investment firm Boyu Capital, selling a 60% stake in its China operations. Under the agreement, Starbucks will retain a 40% stake in its Chinese retail business and maintain ownership of its brand in the region. The coffee giant, which entered China in 1999, has faced increasing competition from local brands like Luckin Coffee, despite being the country’s second-largest market outside the U.S. The partnership with Boyu Capital, described as a ‘significant milestone,’ underscores Starbucks’ commitment to long-term growth in China. The company plans to expand its footprint from 8,000 to 20,000 outlets and introduce new beverages and digital platforms. Boyu Capital, known for its investments in retail, financial services, and technology, brings deep consumer insights to the collaboration. The deal, set to finalize by mid-2025, follows months of uncertainty after former CEO Laxman Narasimhan hinted at strategic partnerships to bolster competitiveness. This move mirrors similar strategies by global brands like KFC and Pizza Hut, which spun off their Chinese operations in 2016. Starbucks has faced declining sales in China due to the pandemic, reduced consumer spending, and fierce competition. Luckin Coffee, with its lower prices and aggressive expansion, now operates more stores than Starbucks in China. Despite price cuts to compete, Starbucks has seen profit margins shrink. Under CEO Brian Niccol, the company is revamping its menu, hiring more baristas, and scaling back automation efforts as part of a broader turnaround strategy. With over 40,000 outlets worldwide, Starbucks continues to navigate challenges in one of its most critical markets.