Starbucks itself is doubling down on China, where in the latest quarter it saw 8 percent same-store sales growth and said it would buy out its joint venture partner in east China for $1.3 billion.
As well as its new Shanghai coffee "roastery", Starbucks has rolled out higher-end coffee bars in China, is looking to improve its food offering, and has leveraged popular mobile payment platforms from Alibaba Group Holding Ltd and Tencent Holdings Ltd.
That premium push may be too late to win back consumers like Zhou Hanwen, a market analyst in Shanghai who says she's a "serious coffee user", but has switched from Starbucks' lattes to smaller, trendy coffee houses.
"I like quieter venues and so usually go to rather arty, yuppie places," she said, while sipping a brew at downtown Mellower Coffee, which has coffees with names like "sweet little rain" - an Americano with a "cloud" of candyfloss.
Zhou added she also now more often makes coffee at home - another trend analysts say is challenging physical stores.
For now at least, China's developing cafe culture is likely to be more a boost than burden for big names like Starbucks.
"There's lots of competition, there always has been," said Schultz. "The market is very large and the competition will survive, we're not thinking about them."
