Coffee Titans Redraw the City Map: Where Will Starbucks Go Next?

A landmark shift has finally arrived. With a USD 13 billion valuation and Boyu Capital acquiring a 60% stake, the long-anticipated Starbucks China sale has officially concluded. Industry observers regard this as the brand’s most significant strategic pivot since entering the Chinese market in 1999.

Just a few years ago, the widely cited “Starbucks Index” was considered a benchmark for measuring urban business vitality, regional competitiveness, and even investment potential. Today, however, the global coffee titan is no longer in such a favorable position within China.

This reality is reflected most clearly in China’s fast-changing coffee retail landscape. Data from Jihai Brand Monitoring shows Starbucks, Luckin Coffee, and Cotti Coffee currently operate 8,105, 29,794, and 15,703 stores nationwide, respectively. Starbucks now has only about half as many locations as Cotti, and less than one-third of Luckin.

Over the past few years, Luckin has aggressively expanded with a rapid rollout strategy and ultra-competitive pricing. It has since surpassed Starbucks both in store count and annual sales, becoming Starbucks’ most direct rival in the Chinese market.

Observers attribute Luckin’s rapid rise to its lower purchase price per customer, faster expansion pace, and sharper understanding of local consumer preferences—all closely tied to its regional development strategy.

So where do Starbucks and Luckin prefer to open stores?

Jihai data shows that Zhejiang leads all provinces with the most Starbucks locations at 1,205. In contrast, Luckin’s highest-volume province is Guangdong, home to 4,320 stores.

On the city level, Starbucks’ top three markets are Shanghai, Beijing, and Hangzhou, while Luckin’s are Shanghai, Shenzhen, and Guangzhou.

Starbucks remains heavily concentrated in Tier-1 and New-Tier-1 cities. Roughly 64% of its 8,105 domestic stores are located in these top-tier markets. Luckin, however, has built a more even presence across the country—44% of its stores are in Tier-1/New-Tier-1 cities, while 39% sit in Tier-2 and Tier-3 markets.

This geographic divergence reflects each brand’s positioning and target consumer. Starbucks champions the premium “third place” experience—an elevated, lifestyle-focused model. Luckin, meanwhile, prioritizes affordability and convenience, appealing to office workers and everyday consumers backed by vast population bases in lower-tier markets.

The newly formed partnership between Starbucks and Boyu Capital comes just as China’s coffee competition intensifies. The two parties have set an ambitious goal: expanding Starbucks China to 20,000 stores in the future.

Brian Niccol, Starbucks’ chairman and CEO, emphasized that Boyu’s deep local expertise will help accelerate Starbucks’ development in China—particularly in smaller cities and emerging regions. Many in the industry now believe the key to regaining momentum lies in these lower-tier markets, where the next wave of growth is expected to unfold.