A decade after former Starbucks then-CEO Howard Schultz said China had the potential to become the U.S. coffee chain’s biggest market, the company is dramatically changing its approach there, selling a majority stake in its China business to an outside partner analysts say is better equipped to help the brand thrive.

The confluence of several factors have made it much harder for Seattle-based Starbucks to pursue its China strategy as initially planned: A loss of business momentum during the COVID pandemic, during which stores were closed for months on end; the emergence of fierce homegrown rivals, especially Luckin Coffee; and weakness in its home market. So now, Starbucks, whose first café in China was opened in 1999, is selling a 60% stake in its retail operations there to Hong Ko

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