Starbucks reveals plans for move into India

Published on Tuesday 31 January 2012 00:00

IT MAY have made its name as a coffee chain but now Starbucks is heading for one of the world’s largest tea producers after yesterday unveiling plans to enter the Indian market.

Starbucks is teaming up with Indian conglomerate Tata – which owns Jaguar, Land Rover and the former British Steel business – to break into the giant developing market.

The pair’s first coffee shop will open in August or September, a year later than originally planned, after difficulties in finding available sites.

While the tie-up plans to take advantage of Tata’s sprawling presence by opening cafes in hotels and retail outlets, it is also looking at other locations such as shopping centres, railway stations, airports and offices.

John Culver, president of Starbucks for China and Asia Pacific, said: “We are in the process of looking at real estate opportunities at the moment.

“We are moving as quickly as possible and the expansion of stores will be based on the customer feedback we get.”

India implemented new rules this month to allow foreign single-brand retailers to operate wholly-owned outlets, but Starbucks said it has not considered changing the 50-50 structure of the Tata Starbucks joint venture.

The first Starbucks shops will open in Mumbai and New Delhi, and the joint venture initially plans to invest 4 billion rupees (£52 million).

The formal launch of the retail foray into India comes a year after it signed a deal with Tata Global Beverages, a unit of the software-to-steel Tata conglomerate and the world’s second-largest branded tea company, to buy coffee from India and open retail outlets in the country.

While India is traditionally a nation of tea-drinkers, young urban professionals have embraced western-style cafe culture – and are prepared to pay the accompanying higher prices. Cafe Coffee Day, a home-grown brand that is India’s largest coffee chain, has nearly 1,200 outlets.

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