Starbucks plans 50-100 new stores every year in India
What's the story
Starbucks is planning to expand its footprint in India by opening 50-100 new stores every year. This was revealed by Tata Starbucks Chief Executive Officer Sushant Dash in an interview with Bloomberg Television. The move comes as part of the company's strategy to strengthen its position in the country's rapidly growing coffee market. Tata Starbucks is a joint venture between Seattle-based Starbucks and India's Tata Group.
Market potential
India is one of the fastest-growing markets for Starbucks
Dash said that India is one of the fastest-growing markets for Starbucks globally. The company has more than doubled its store count to over 500 locations in the last four to five years. It also holds a market share of about 30% in the country. This growth comes amid rising incomes and changing consumer habits driving increased coffee consumption across India.
Market dynamics
Competition and growth potential
The growing coffee consumption in India has also led to increased competition from local chains like abCoffee and Blue Tokai, as well as international brands. Despite the competition, Dash believes there is immense growth potential for Starbucks. He noted that only about 24% of Indians drink coffee compared to some 93% for tea. This means there is still a long way to go in terms of market penetration.
Expansion strategies
Different formats and focus on expansion
Tata Starbucks employs different formats including drive-throughs, highway stores, kiosks, and experiential locations. It also has four 'Reserve' stores that serve premium coffees. The Reserve format was first launched in Mumbai and later expanded to Delhi and Kolkata. Despite being loss-making at present, Dash said the company will continue investing in expansion and won't "sacrifice growth for profitability."