Starbucks faces major challenges in China, where sales dropped 14% last quarter, despite CEO Brian Niccol's arrival, as Luckin Coffee grows stronger.
With a goal of 9,000 locations in China by 2025, Starbucks lags behind already having only 7,000, while rival Luckin Coffee expands rapidly with over 16,000.
The coffee shop market in China is highly fragmented, with around 50,000 total locations, complicating Starbucks' efforts to regain market share.
Investors often overlook deeper issues facing companies; Starbucks' challenges in China may be insurmountable, exacerbated by increased competition from local brands.
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