US-based coffee chain major Starbucks, which entered the Indian market in October 2012 with a 50:50 joint venture with Tata Global Beverages, opened its 50th store in in the filter coffee capital of the nation, Chennai. With the new addition, the chain now operates coffee outlets across Mumbai,
Delhi NCR, Pune, Bangalore and Chennai, and plans to foray into Hyderabad later this year. In an interaction with FE?s Sajan C Kumar, Tata Starbucks CEO Avani Davda shares her thoughts on the journey so far and the way forward. Excerpts:
You had started operations in 2012, and reached 50 stores in 5 locations now. How has been the journey so far?
In the last 20 months, we had a very exciting time out here in India. In fact, we had a different kind of brand launch something India has never seen before.
The launch was so simple. Since over the years, Starbucks has built a heritage of coffee, it could break the myth of India being a tea-drinking nation. In these months, we received a tremendous response because the brand is well known. Still, we cannot sit back as we have to earn the respect of the customers. For us, each store is important and it takes time to nurture it. Our investments are mainly the partners (employees), who also double up as our brand managers.
In the market dominated by home-grown players, what was your strategy to build the brand in India?
Our aim was to redefine the coffee chain space. The brand-building was mainly done according to a well thought-out long-term digital strategy. In the era of increasing smartphone usage, the digital strategy played off very effectively. The conventional rules of branding and marketing have been changed.
How different are your Indian outlets compared with the counterparts in other countries?
Starbucks is a global citizen. We understand and imbibe the country?s culture where we operate. The way to do that effectively is by making that country the home of the brand. The best way out here is to balance it by making available Indian recipes and international cuisines. In terms of business, in our outlets a fourth of the business comes from food, but food cannot overpower coffee. It has to blend.
How do you see the competion in the market place? What are your expansion plans?
Certainly in India, a lot of homegrown brands have been in the lime light. I must say that they have grown well. We have started off by changing the way the coffee space has been looked at and are certainly proud of doing it. With regard to competition, I must say that it all reflects on our store design and quality of beverages. I think in the next three years we would to see the partners growing to 3,000 from the current 1,000. We want to grow in a sustainable, locally-relevant way. We want to know what it takes to win the cusotmers. There is an incredible opportunity in India and we have long- term expansion plan. We want to give more incentives to our customers, and My Starbucks Rewards is coming to India by September.