Starbucks is exploring options for its Chinese operations, including the possibility of selling a stake in the business, according to Bloomberg.

The coffee chain has been in talks with advisers about ways to expand its presence in China, which could include introducing a local partner. Starbucks has informally gauged interest from potential investors, such as domestic private equity firms.

The sale of a stake may attract interest from Chinese conglomerates or other local companies with industry expertise; however, Starbucks is still evaluating its options and has not yet reached a final decision.

Other international brands, including McDonald's and Yum! Brands, have previously sold stakes in their Chinese operations to private equity firms to better cater to local tastes and fuel growth.

With nearly 7,600 stores, China is Starbucks's second-largest market, generating around $3 billion in net revenue in fiscal year 2023. However, competition is intensifying, particularly from local upstart Luckin Coffee. New CEO Brian Niccol acknowledged last month that China's comparable sales fell by 14%, as both average ticket size and transaction volume plummeted under the weight of intensified competition and a soft macroeconomic environment ​that impacted consumer spending.

A spokesperson for Starbucks stated in response to Bloomberg inquiries: "We are fully committed to our business and partners, and to growing in China. We are working to find the best path to growth, which includes exploring strategic partnerships.”

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