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Starbucks plans to sell its stakes in South Korea to local partners

Starbucks plans to sell its stakes in South Korea to local partners

July 30 - 2021 Coffee Geography Magazine South Korea is Starbucks' fifth-largest market but the country offers little growth opportunity for the world's largest coffee chain due to weak demand for the brand. Starbucks Corp wants to sell the majority stakes in the joint venture (JV) in South Korea that's valued at $2 billion by transfering to  local partner E-Mart Inc and Singapore sovereign wealth fund GIC, as it looks to invest more in fast-growing international markets.
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Starbucks’ marketing strategy is influenced by the fast growing international markets outside South Korea. 

 E-Mart, one of the largest retailers in South Korea with over 160 stores and the owner of half of the JV, will buy an additional 17.5-percent stake in Starbucks Coffee Korea for $411 million, according to its filing on Tuesday. GIC will own the remaining 32.5 percent.

"Part of our success in South Korea -- and in many of our international markets -- is due to our expertise and judgment in knowing when to rely on local partners to continue to build the business," Michael Conway, Starbucks' group president for international and channel development, said in a statement.

Michael Conway, group president International and Channel Development for Starbucks
Michael Conway, group president International and Channel Development for Starbucks

E-Mart and its parent Shinsegae Group have leveraged a pandemic-led disruption in the Asian e-commerce industry to buy up some businesses, including eBay's South Korean unit for $3 billion. 

A Shinsegae spokesperson said Starbucks Coffee Korea will continue to be in a licensing agreement with Starbucks, as it has been when it was a JV between Starbucks and Shinsegae Group.

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