Starbucks announced on Monday (November 3) that it will sell 60% of its China business to Boyu Capital for $4 billion. This is one of the restructuring measures taken by CEO Brian Niccol since taking office.
Starbucks entered China 30 years ago, successfully promoting the rise of coffee culture in China. It has about 8,000 stores in China. However, in recent years, Starbucks has faced fierce competition from local affordable brands such as Luckin Coffee, leading to a decline in sales in Chinese stores over the past two fiscal years.
Therefore, in May this year, Starbucks officially started the process of selling its China business, seeking potential investors to help expand its business in China, especially in small and medium-sized cities. In this transaction, Starbucks will retain 40% of the shares and have the right to use the Starbucks brand. Both parties expect to complete the transaction in the second quarter of the 2026 fiscal year.
Although President Trump met with Chinese leader Xi Jinping on October 30, extending the trade truce period and avoiding imposing 100% tariffs on Chinese goods, with the intensification of economic competition between the US and China, more and more American companies have reduced their business and investments in China.
Here is a list of some American companies divesting from China:
Best Buy sold 184 Five Star stores to Chinese local real estate company Zhejiang Jiayuan Group, exiting the retail business in China, and stating that this move is to focus on the North American market. Best Buy faces strong low-price competition in the Chinese market, making it difficult to compete with local rivals. Other American companies have also complained that the operating environment in China has become increasingly challenging.
Yum China, the parent company of KFC and Pizza Hut, sold a portion of its Yum China shares to investment company Primavera Capital and Alibaba’s subsidiary for $460 million back in 2016.
Later that year, Yum China faced pressure from investors due to food scandals and marketing mistakes, leading to its separation from the parent company and independent listing on the New York Stock Exchange.
Uber sold its China business to Didi Chuxing in August 2016.
In 2017, McDonald’s sold the majority of its equity in China and Hong Kong operations for up to $2.1 billion to CITIC Group and Carlyle Group. At that time, McDonald’s faced operational difficulties in China due to food safety scandals and intense competition from local chain restaurants.
In 2023, McDonald’s increased its stake in the China business to 48% by purchasing a 28% stake from Carlyle Group, valuing the stake at $6 billion.
Amazon closed its Chinese e-commerce platform in 2019, focusing on cross-border e-commerce and cloud services.
In addition to trade factors, Amazon also sold a portion of its AWS physical assets in China to Beijing Sinnet Technology, with the transaction amounting to approximately 2 billion RMB.
Gap sold its Greater China business to Baozun.
Baozun acquired Gap Shanghai Commercial and Gap Taiwan Ltd for about $50 million at the time, operating all of Gap’s business in Greater China.
According to Baozun’s declaration, both companies were incurring losses, with the Shanghai company reporting a net loss of 256 million RMB ($35.34 million) after tax in 2021. The Taiwan company had a net loss of 199.8 million TWD ($6.24 million) by the end of the fiscal year on January 29, 2022.
(This article references reports from Reuters and AP)