BUSINESS

Carlyle, HongShan, EQT Among Final Contenders for Starbucks’ China Business

Published: Sep. 13, 2025 2:32 a.m. GMT+8

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As of the end of June, Starbucks operated nearly 8,000 stores in China

Starbucks Corp. has shortlisted four private equity bidders for a stake in its China operations and may select a new strategic partner as soon as October, according to people familiar with the matter.

The contenders are Boyu Capital, Carlyle Group Inc., HongShan Capital Group, and a consortium formed by Primavera Capital Group and EQT Partners. Starbucks is banking on the chosen firm to help it steer through an increasingly saturated and competitive coffee market on the Chinese mainland. Once dominant, the U.S. coffee chain has seen its lead eroded by rapid expansion from local players like Luckin Coffee and Cotti Coffee. The size of the stake on offer hasn’t been disclosed.

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Starbucks has shortlisted four private equity bidders for a stake in its China operations, aiming to select a partner by October 2024.
China contributes about 9% of Starbucks' global revenue, with nearly 8,000 stores; its market share fell to 4.2% in 2024, behind Cotti Coffee and Luckin Coffee (11%).
The stake's valuation may exceed $9 billion, but insiders see this as high; Starbucks plans to keep significant ownership.

AI generated, for reference only

Who’s Who

Starbucks Corp.: Starbucks Corp. is seeking a strategic partner for its China operations, shortlisting four private equity bidders: Boyu Capital, Carlyle Group Inc., HongShan Capital Group, and a Primavera Capital Group/EQT Partners consortium. This move aims to navigate an increasingly competitive Chinese coffee market where its lead has been eroded by local players. Starbucks plans to retain a significant stake, viewing the partnership as a way to enhance operational efficiency rather than just raising funds.

Boyu Capital: Boyu Capital has been shortlisted as a potential private equity bidder for a stake in Starbucks' China operations. They have notable consumer-sector credentials, having backed the fashion powerhouse SHEIN and reportedly exploring a stake in Beijing Hualian (SKP) Department Store Co. Ltd. Starbucks hopes the chosen firm will help navigate the increasingly competitive Chinese coffee market.

Carlyle Group Inc.: Carlyle Group Inc. is one of the four private equity bidders shortlisted by Starbucks for a stake in its China operations. Carlyle previously held a 20% stake in McDonald's China but sold it back to McDonald's global parent in 2023. Carlyle also participated in a roadshow for the Starbucks China investment, which included over 20 institutional investors.

HongShan Capital Group: HongShan Capital Group is one of four private equity firms shortlisted to acquire a stake in Starbucks' China operations. They have a strong record in consumer-sector investments, including Guming Holdings Ltd., Pop Mart, and Saturnbird Coffee. Notably, HongShan also previously co-founded a joint venture investment firm with Starbucks China.

Primavera Capital Group: Primavera Capital Group, a major shareholder in Yum China Holdings Inc. (operator of KFC in China), has formed a consortium with EQT Partners to bid for a stake in Starbucks' China operations. They are one of four shortlisted private equity bidders.

EQT Partners: EQT Partners is a Stockholm-headquartered private equity firm. They are part of a consortium with Primavera Capital Group, which is shortlisted as a potential bidder for a stake in Starbucks' China operations. EQT is currently raising capital for its BPEA Private Equity Fund IX, having secured $11.4 billion by July 17.

Luckin Coffee: Luckin Coffee is a local Chinese player that has contributed to the erosion of Starbucks' lead in the Chinese coffee market. It currently holds the largest market share in China, at 11%, outpacing both Starbucks and Cotti Coffee. Its rapid expansion is noted as a factor intensifying competition for Starbucks.

Cotti Coffee: Cotti Coffee is a local Chinese coffee chain that has significantly impacted Starbucks' market share in China. It has surpassed Starbucks in market share, becoming a leading competitor. The article indicates that its rapid expansion, alongside Luckin Coffee, has eroded Starbucks' once-dominant position in the Chinese coffee market.

Guming Holdings Ltd.: Guming Holdings Ltd. is a bubble tea chain that has received investment from HongShan Capital Group. HongShan Capital Group is one of the private equity bidders shortlisted by Starbucks for a stake in its China operations.

Pop Mart: Pop Mart is a toy retailer that has received investment from HongShan Capital Group. This information is mentioned in the context of HongShan Capital Group's consumer-sector credentials, highlighting their involvement with various brands including Pop Mart.

Saturnbird Coffee: HongShan Capital Group has invested in Saturnbird Coffee, a boutique coffee startup. This investment highlights HongShan's credentials in the consumer sector, indicating their involvement with innovative and emerging brands within the coffee industry.

SHEIN: Boyu Capital has backed the fashion powerhouse SHEIN. While SHEIN's exact role in the current Starbucks China operations discussions isn't explicitly detailed, Boyu Capital's involvement suggests its interest in successful consumer brands.

Beijing Hualian (SKP) Department Store Co. Ltd.: Boyu Capital is reportedly exploring a stake in Beijing Hualian (SKP) Department Store Co. Ltd. This highlights Boyu Capital's interest in the retail sector and its potential to influence a prominent department store in China.

McDonald’s: Carlyle Group Inc. once held a 20% stake in **McDonald's** China operations. However, Carlyle sold that portion back to **McDonald's** global parent in 2023. **McDonald's (麦当劳)** is a major fast-food chain.

Yum China Holdings Inc.: Primavera is a major shareholder in Yum China Holdings Inc. This company operates KFC in China.

China Resources Holdings: China Resources Holdings was among the firms with whom Starbucks reportedly met in February 2024 regarding potential investment in its China operations. Starbucks's China arm was seeking a strategic partner to navigate a competitive market, though valuation remained a sticking point.

KKR: KKR was among the firms that Starbucks reportedly met with in February when talks resumed regarding bringing investment into its China operations. This meeting was part of a process to find a strategic partner to help Starbucks navigate the increasingly competitive Chinese coffee market.

FountainVest Partners: FountainVest Partners participated in discussions with Starbucks in February regarding a potential investment in the coffee giant's China operations. They were among several firms, including China Resources Holdings and KKR, that Starbucks reportedly met with.

Hillhouse Capital: 高瓴资本 (Hillhouse Capital) participated in a roadshow for a potential stake in Starbucks' China operations. This indicates their interest in the Chinese coffee market and their engagement with significant investment opportunities within the region. They were among more than 20 institutional investors present at the event.

Meituan: Meituan, a Chinese tech giant, has a strategic investment arm that participated in the roadshow for Starbucks China's potential stake sale. This indicates Meituan's interest in the consumer sector and possibly its strategic alignment with the food and beverage industry in China.

Zheshang Securities: Zheshang Securities is mentioned in the article as a source for market share data regarding the Chinese coffee market. According to their analysis, Starbucks' share of the Chinese coffee market declined from 5.6% in 2022 to 4.2% in 2024. This places Starbucks behind local competitors like Cotti Coffee and Luckin Coffee, with Luckin holding the largest share at 11%.

AI generated, for reference only

What Happened When

2023：: Carlyle sold its 20% stake in McDonald's China operations back to McDonald's global parent.

Early 2024：: Starbucks first floated the idea of bringing in investment for its China arm after two straight quarters of declining revenue and same-store sales in the market.

2024：: Starbucks’ share of the Chinese coffee market dropped to 4.2%, according to Zheshang Securities.

February 2025：: Starbucks resumed talks with firms including China Resources Holdings, KKR, and FountainVest Partners.

Second quarter of 2025：: Starbucks generated $790 million in China revenue — nearly 40% of all international revenue outside North America.

By June 2025：: Starbucks China had launched a roadshow, drawing participation from over 20 institutional investors, including Hillhouse Capital, Carlyle, and Meituan.

As of the end of June 2025：: Starbucks operated nearly 8,000 stores in China.

July 2025：: On an earnings call, Brian Niccol stated that Starbucks intends to retain a significant stake in its China unit and framed the partnership as a move to enhance operational efficiency.