The world’s largest coffee chain, Seattle-based Starbucks, is busy finalising locations across major malls in Mumbai and New Delhi for an India opening by this September. The $10.7-billion American group, in a joint venture with Tata Global Beverages, is completing deals for around 10 locations in the country at present, according to market intelligence.
John Culver, president, Starbucks China and Asia Pacific, confirmed to Business Standard that the group would start its India journey with stores in Mumbai and New Delhi, and that the first outlet was expected by September.
Starbucks had signed a deal with Tata Global Beverages more than a year ago, but announced the formal launch of the US chain’s retail foray about two months ago. Then, Starbucks senior management had said 50 outlets would be opened by the year-end. But at this point, the company is quiet on the specific rollout plan for 2012. “While we cannot share specific plans, we are committed to investing in growing our presence in the market and will do so in a smart, thoughtful way that meets and exceeds the expectations of our customers,” Culver said.
Arvind Singhal, founder of Technopak Advisors, said the initial rollout would be like pilot projects, after which Tata Starbucks Ltd is expected to go all out. Every mall in any big city would like to get the Starbucks brand in, he added.
Market information suggests that the chain has already booked space in a mall in West Delhi and is in the process of finalising things in prominent South Delhi malls, according to global real estate advisor DTZ. In Mumbai, it is in talks to open an outlet at the 1.3 million sq ft building ‘The Capital’ in the Bandra-Kurla Complex, DTZ said.
Indicating top level hiring activity at the India operation of the chain, head of a leading executive search company said there’s hardly any action in the retail space apart from that in chains like Starbucks and Pizza Express. Adding: Starbucks was conducting an India-based search for CEO, CFO and others in the top management.
When asked whether the leadership team at Starbucks-Tata would be local hires or those from international markets, Culver pointed at the importance of local talent. “As a 50-50 JV, Tata Starbucks is accountable for hiring a management team that brings leadership capabilities and local knowledge to the joint venture, with a focus on delivering the highest-quality Starbucks experience to our India customers,” said Culver.
On investments in India, Culver only said, “We are here to build a strong presence and committed to the Indian market for the long term.”
On whether Starbucks would open restaurants and entertainment divisions in India, like it has done in the US and some other markets, Culver said the company was “focused on opening Starbucks cafes in India”.
As for the growing competition in the coffee outlets category in India, the Starbucks official said, “the Indian market is growing multifold and the marketplace has room for many coffeehouses that meet different customer needs. Organised coffee market in India is pegged at about $140 million (Rs 714 crore at the current forex rate). The country's annual coffee sales are estimated at $667 million (Rs 3,350 crore).