Starbucks to open outlets in more Indian cities

New Delhi, April 7 (IANS) Encouraged by the “tremendous response”, Starbucks Coffee is planning to expand to more locations to tap the full potential of the vast Indian market where the coffee shop industry is growing at a fast clip.

“Till now, we have had a tremendous response to all our outlets in Mumbai and Delhi. We will go where we find customer demand,” Avani Davda, chief executive of Tata Starbucks, a joint venture (JV) between Starbucks Coffee Company of the US and India’s Tata Group, told IANS in an interview.

Davda said customers had appreciated the entry price point of the offerings of the firm and it was looking at the market potential of various regions across the country.

“We see a lot of potential…It’s a country of over a billion people. You cannot gauge how much demand there is and will be,” the 33-year-old chief executive said, adding that data on India’s retail coffee industry is still in the nascent stage.

While India is known for its tea drinking, sipping coffee and socializing at coffee shops is becoming increasingly popular as the young and the middle class acquire more Western tastes. Group networking is embracing the practice of meetings over coffee. Professional and recreational clubs gather routinely at coffee shops in major cities to discuss business and pleasure.

Market estimates predict that at least 100 million new coffee drinkers are likely to emerge in the country in the near future. The coffee shop industry has been growing at a compounded annual rate of 25 percent for the past few years.

Davda did not reveal the next destinations of the company outlets when asked specifically about the new places the company is venturing into.

Asked whether the company will now head for southern India, known for its coffee production as well as consumption, Davda said: “Surely, the southern Indian market is a very important region and is known for its coffee consumption. We’ll look at all the opportunities which come our way.”

Starbucks entered the Indian market in October 2012 and currently operates six stores in Mumbai, two at the New Delhi’s Indira Gandhi International Airport and three more in the city.

On the entry level price point, Davda said customers had responded well to the lowest offering of Rs.80, which was significantly lower than other international competitors.

“The response on prices of our offering has been great. The prices have been much appreciated. We do not foresee any price cut.”

The company has tweaked its menu to suit Indian tastes and pockets. “We want to be accessible to everyone,” Starbucks Coffee chief executive Howard Schultz had said at the opening of the first store in Mumbai.

The company is currently competing with international majors like Barista Lavazza, Costa Coffee, Gloria Jean’s, Coffee Bean & Tea Leaf and Dunkin Donuts as well as Indian market leader Cafe Coffee Day, owned by an Indian coffee conglomerate.

(Rohit Vaid can be contacted at [email protected])

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