19 Oct 2012
U.S coffee giant Starbucks opened its first store in India on Friday.
After six years of research the local market, Starbucks made a
rapid-fire entry into the third largest economy in Asia Coffee houses
and chains relatively unknown India, and the chains already in business
sell cappuccinos and lattes well below Starbuck’s price, according to NDTV
he company, in a joint venture with Tata Global Beverages, plans to open two additional stores in Mumbai next week—on Wednesday in the Taj Mahal Palace hotel and on Thursday in the Oberoi hotel across town—before launching in New Delhi early next year.
For the flagship Mumbai store, Starbucks chose the historic Elphinstone Building in the Horniman Circle neighborhood of south Mumbai, not far from a vast Hermes shop and a stately local park maintained with funds from the family foundation of Italian designer Ermenegildo Zegna.
The flagship, which can accommodate 120 people, is a cool, soaring space, with hand-carved wooden screens, thick tables of solid Indian teak, painted vintage trunks and old leather-bound books.
Schultz said he hoped the effect would be like “walking into a shrine of Starbucks coffee”.
The shop will offer free Wi-Fi and stay open until 11 p.m. Monday through Thursday and 1 a.m. on weekends, unusually late for Mumbai cafes.
The 42 menu items reflect local as well as Western tastes, featuring items such as Elaichi Mawa croissants—made with cardamom and milk solids—and tandoori paneer rolls.
The prices position Starbucks at the premium end of India’s coffee cafes, with a 12 ounce cappuccino retailing for a little over $2.
“We’ve been trying to in a sense crack the code here,” Schultz said. The company decided early on they needed to enter India with a local partner, as they did in China. Schultz said he spoke with many interested parties, but none “had the complete suite of things we felt were necessary to build a big, enduring business. That changed the day we met Tata”.
Schultz came to India in November 2010 to begin “substantive conversations” with the salt-to-SUVs Tata conglomerate, which were followed by meetings in Seattle and a January 2011 coffee sourcing agreement with Tata Coffee. A year later, Starbucks announced it had formed a 50-50 joint venture with Tata Global Beverages called Tata Starbucks Ltd. At the time, the vice chairman of Tata Global Beverages, R.K. Krishnakumar, said the joint venture hoped to open 50 stores by the end of 2012—a statement Starbucks has since tried to distance itself from.
The company won’t comment on expansion targets, but Schultz pointed to Starbucks’ presence in other markets as examples of the scale he is interested in. There are more than 700 outlets in mainland China, he said, and 1,000 in Japan. While those numbers are dwarfed by the over 10,000 outlets in the United States, Asia has emerged as a key driver of growth.
“Asia and the entire Pacific Rim present one of the most significant growth opportunities within Starbucks Coffee Company,” Schultz said. “India is at the core, along with China.”
Starbucks said in April that China—where it opened an average of one store every four days during fiscal year 2011—will likely be its second-largest market by 2014.
The partnership with Tata has brought Starbucks access to some prime real estate for its outlets. The Elphinstone Building, for example, is owned by Tata Sons, the holding company that controls the Tata Group. The Taj Mahal hotel, site of the second shop, is also a Tata property.
It has also enabled Starbucks to enter a market with a locally grown and roasted espresso for the first time. The “Indian Espresso Roast” is sourced through an agreement with Tata Coffee, a sister company to Tata Global Beverages.
Unlike Europe, where Starbucks has foundered on entrenched cafe cultures, India is full of young people looking for an unintimidating place to hang out, away from the prying eyes and cramped quarters of home.
Read More…
he company, in a joint venture with Tata Global Beverages, plans to open two additional stores in Mumbai next week—on Wednesday in the Taj Mahal Palace hotel and on Thursday in the Oberoi hotel across town—before launching in New Delhi early next year.
For the flagship Mumbai store, Starbucks chose the historic Elphinstone Building in the Horniman Circle neighborhood of south Mumbai, not far from a vast Hermes shop and a stately local park maintained with funds from the family foundation of Italian designer Ermenegildo Zegna.
The flagship, which can accommodate 120 people, is a cool, soaring space, with hand-carved wooden screens, thick tables of solid Indian teak, painted vintage trunks and old leather-bound books.
Schultz said he hoped the effect would be like “walking into a shrine of Starbucks coffee”.
The shop will offer free Wi-Fi and stay open until 11 p.m. Monday through Thursday and 1 a.m. on weekends, unusually late for Mumbai cafes.
The 42 menu items reflect local as well as Western tastes, featuring items such as Elaichi Mawa croissants—made with cardamom and milk solids—and tandoori paneer rolls.
The prices position Starbucks at the premium end of India’s coffee cafes, with a 12 ounce cappuccino retailing for a little over $2.
“We’ve been trying to in a sense crack the code here,” Schultz said. The company decided early on they needed to enter India with a local partner, as they did in China. Schultz said he spoke with many interested parties, but none “had the complete suite of things we felt were necessary to build a big, enduring business. That changed the day we met Tata”.
Schultz came to India in November 2010 to begin “substantive conversations” with the salt-to-SUVs Tata conglomerate, which were followed by meetings in Seattle and a January 2011 coffee sourcing agreement with Tata Coffee. A year later, Starbucks announced it had formed a 50-50 joint venture with Tata Global Beverages called Tata Starbucks Ltd. At the time, the vice chairman of Tata Global Beverages, R.K. Krishnakumar, said the joint venture hoped to open 50 stores by the end of 2012—a statement Starbucks has since tried to distance itself from.
The company won’t comment on expansion targets, but Schultz pointed to Starbucks’ presence in other markets as examples of the scale he is interested in. There are more than 700 outlets in mainland China, he said, and 1,000 in Japan. While those numbers are dwarfed by the over 10,000 outlets in the United States, Asia has emerged as a key driver of growth.
“Asia and the entire Pacific Rim present one of the most significant growth opportunities within Starbucks Coffee Company,” Schultz said. “India is at the core, along with China.”
Starbucks said in April that China—where it opened an average of one store every four days during fiscal year 2011—will likely be its second-largest market by 2014.
The partnership with Tata has brought Starbucks access to some prime real estate for its outlets. The Elphinstone Building, for example, is owned by Tata Sons, the holding company that controls the Tata Group. The Taj Mahal hotel, site of the second shop, is also a Tata property.
It has also enabled Starbucks to enter a market with a locally grown and roasted espresso for the first time. The “Indian Espresso Roast” is sourced through an agreement with Tata Coffee, a sister company to Tata Global Beverages.
Unlike Europe, where Starbucks has foundered on entrenched cafe cultures, India is full of young people looking for an unintimidating place to hang out, away from the prying eyes and cramped quarters of home.
Read More…
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