Starbucks Corporation is exploring options for its Chinese operations including the possibility of selling a stake in the business, according to people with knowledge of the matter.

The coffee chain has been speaking to advisors about ways to grow its operations in China including the potential introduction of a local partner, the people said, asking not to be identified because the information is private. It has informally gauged interest from prospective investors, including domestic private equity firms, the people said.

A stake sale could also attract interest from Chinese conglomerates or other local companies with experience in the industry, some of the people said. Starbucks is still evaluating its options and hasn't made a decision about whether to proceed, the people said.

China is the second-biggest market globally for Starbucks and generated about US$3 billion of net revenue in the most recent financial year, when the company increased its store count in the country by 12%. But local upstarts such as Luckin Coffee Inc are increasingly challenging their position.

New Starbucks Chief Executive Officer Brian Niccol told analysts last month that he's working to better understand the company's Chinese operations, noting that the competitive environment seems "extreme" and the macro environment is "tough".

Starbucks needs to figure out how to expand in the market and is continuing to explore strategic partnerships that could help it over the long term, Niccol said at the time, without providing further details.

Starbucks had 7,596 outlets in China as of late September, accounting for about 19% of the global total. Same-store sales fell 14% in China last quarter.