Three years, 83 stores, six cities. Encouraging statistics for Tata Starbucks, as it continues to fortify its efforts to encourage the coffee shop culture in India. The company has, over the last three years, put several initiatives in place to enhance the customer experience, one of which is having Coffee Masters across stores. A certified Coffee Master herself, Tata Starbucks’ director – marketing & category, Manmeet Vohra takes time out for a discussion with FE’s Chandni Mathur about the company’s strategy in India. Excerpts:
Starbucks is set to launch a mobile payment and loyalty app in India. How will it further change the experience?
The mobile payment and loyalty app is definitely something which is brewing and we are excited to be working on it. It will elevate the experience of My Starbucks Rewards members. It should be out later this year. Going forward, we will also be launching a speciality tea brand, Teavana, which is owned by Starbucks and is available within the stores in the US as well as in standalone Teavana boutiques. In India, we will be offering a selection of Teavana SKUs within our stores. It will be available from early 2017.
In what ways have you customised the experience for Indian customers in terms of the service, product, retail level activities, store layout?
Indians love food and the outcome of that is almost 25% of our sales come from food products, which is maximum for Starbucks anywhere. In order to cater to everyone’s liking, we make sure that we have a mix of international favourites and local flavours. In terms of the experience, there are no two stores of Starbucks that look similar. Our flagship stores is where a lot of local inspiration is taken. For example, our flagship store in Pune has copper design elements because the history of Pune dates back to the discovery of copper coins, the store in Hyderabad has Hyderabadi pearls, Delhi has local jute handiwork and the store in Bandra has an artwork of the sealink.
In December 2014, Australian café brand Gloria Jean’s Coffees exited India. Operationally, Tata Starbucks had to suspend the use of vanilla and hazelnut syrups following an order by FSSAI. Do you feel India is not an easy country to operate in? What are the challenges?
There would be different challenges in different industries anywhere you go. Yes, we have had certain challenges with FSSAI but we have managed to work closely with them and find solutions to get all the required technical approvals. There are a lot of process related issues at times, but I think that does not hamper our spirit in terms of steering the business ahead.
In India specifically, in order to take the Starbucks experience forward, real estate availability is a bigger challenge because we want to be wherever our customers want and expect us to be.
With 83 stores in India, and all of them in the urban cities, do you see more adoption in urban areas? Do you also have a plan for expansion into smaller cities?
I think it’s a journey. For us to have 83 stores in six cities in three years is a phenomenal pace of progress and that is something we are proud of. There are certain challenges regarding supply chain capabilities, alignment and efficiencies, which is why it makes more sense to consolidate in one city before you branch out wider. We will go along with time and there are definitely plans of looking at more cities.
What traction do you see from the Starbucks merchandise?
In terms of cups and tumblers, we have some unique designs and the India mug is always the number one selling mug. We also encourage our customers to bring back their mugs or tumblers to save paper and plastic, and give them a R10 discount for it. The merchandise sales are a small contribution to revenues, presently single digit. Since the culture is more for-here, once the to-go part increases, carrying the merchandise will automatically grow with that.