Starbucks sold its stake in its South-Korean joint venture, worth in total over US$2 billion. The best they can do, is reinvest their capital in expansion in China, says business analyst Shaun Rein to Reuters. “Using the sale of its South Korean operations will equip it with more cash that it can deploy to China,” Rein said.
South Korea is Starbucks’ fifth-largest market with more than 1,500 stores across 78 cities, but analysts said that the country offers little growth opportunity for the world’s largest coffee chain due to its mature and saturated market.
“South Korea … would not be a market for major growth in the coming years. It’s better for them to sell their stake use the capital and proceeds to invest in faster growth markets like China,” China Market Research Group analyst Shaun Rein said.
The U.S. company has in recent years been expanding globally especially in China as its largest market – the United States – saturates and grapples with stiff competition. Sales from China in its latest second-quarter report nearly doubled.
“Using the sale of its South Korean operations will equip it with more cash that it can deploy to China,” Rein said.
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