Starbucks Doubles Down on China: CEO Reveals Surging Investor Interest in 2025

Starbucks brews up a bold China play—and Wall Street''s already addicted.

### The Middle Kingdom''s caffeine rush

China''s coffee market is boiling over, and Starbucks just turned up the heat. The Seattle giant''s aggressive expansion strategy has analysts buzzing louder than a barista''s espresso machine.

### Investor froth reaches new highs

CEO Laxman Narasimha dropped the mic: ''We''ve got more suitors than a Shanghai speed-dating event.'' Translation? The money''s pouring in faster than pumpkin spice lattes in autumn.

### The bitter aftertaste

Meanwhile, hedge funds are scrambling like over-caffeinated traders—some betting on Starbucks'' success, others shorting China''s economy. Because nothing says ''stable investment'' like gambling on geopolitical tensions and consumer whims.

Confident Investing Starts Here:

• Easily unpack a company''s performance with TipRanks'' new KPI Data for smart investment decisions
• Receive undervalued, market resilient stocks right to your inbox with TipRanks'' Smart Value Newsletter

On June 9, Starbucks also announced that it was reducing prices on dozens of its Chinese drinks to make them more “accessible.” On average, the company cut prices by $0.70 (Rmb5) on more than 20 iced and tea-based drinks. This step was taken to target China’s fast-growing non-coffee market.

China Sales Slow Amid Market Headwinds

China is the coffee maker’s second-largest market after the U.S. As of March 31, 2025, Starbucks operated 7,758 stores on the Mainland. The company had set a goal of opening 9,000 stores by the end of this year, but that goal looks like a distant dream now.

Same-store sales in China are declining, while total revenues slumped to $3 billion in fiscal 2024 from a peak of $3.7 billion recorded in FY21. Intense competition from more economical domestic players, including Luckin Coffee (LKNCY) and Cotti Coffee, has eaten into Starbucks’ market share in the country. Meanwhile, cheaper alternatives such as bubble tea and milk tea companies have drawn customers to their stores. Additionally, an uncertain macroeconomic environment coupled with weaker consumer demand has worsened Starbucks’ woes.

Starbucks Seeks Partnerships to Boost China Growth

At this difficult juncture, Niccol has sought to explore partnerships with external investors to propel Starbucks’ growth. At the same time, he is committed to keeping a “meaningful stake” in the Chinese business. The company seems to be in no hurry to sell its stake, planning to go through the entire exercise process formally to evaluate if having a partner even makes sense. Reports suggest that investors from all realms, including Chinese and foreign private equity companies, as well as strategic investors have shown interest in partnering with Starbucks.

In February this year, a Reuters report stated that U.S.-based KKR & Co. (KKR) was also interested in acquiring a stake in Starbucks China. The CEO is confident that investors see high value in the Starbucks brand amid a growing coffee market and are thus excited to partner with the company.

Is SBUX a Good Stock to Buy?

Analysts remain divided on Starbucks’ long-term stock trajectory. On TipRanks, SBUX stock has a Moderate Buy consensus rating based on nine Buys versus nine Hold ratings. The average Starbucks price target of $94 implies 2.8% upside potential from current levels. Year-to-date, SBUX stock has gained 1.5%.