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Luckin Coffee is just the tip of Starbucks’ China woes
A spin-off or joint venture with a local partner is essential for the iconic American coffee chain’s survival.
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Chinese home-grown brand Luckin Coffee staged an amazing comeback after being delisted from the Nasdaq for accounting fraud in 2020.
PHOTO: BLOOMBERG
Shuli Ren
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As Starbucks’ new chief executive officer Brian Niccol engineers a business turnaround, what to do with its operations in China must be on the top of his mind. The American coffee chain is exploring strategic options, including a possible stake sale.
China is becoming a drag. The country accounts for less than 10 per cent of revenue, even though nearly 20 per cent of its outlets are located there. In the September quarter, same-store sales tumbled 14 per cent from a year earlier, even worse than the 6 per cent decline in the US.
