If Starbucks came to India ..

Posted in Uncategorized by Abhinaya Chandrasekhar on September 12, 2009

I am a fan of Starbucks. A die-hard fan. As a kid, I remember climbing up on the bar stool, returning the smile to the lady on the other side and asking for a tall latte. They always gave me a free cookie! As a teen, I remember sitting in the corner with a borrowed book from British Council, sipping my cappuccino. The place was always warm, friendly and had a homely feel to it.

Its been six years and I live in India now. There are no Starbucks outlets here. But, there has always been a doubt in my mind. Would Starbucks work in India?

The Indian consumer

The Indian consumer is not pampered. He chooses from options given to him. No customization allowed. Most of the brands have now become me-too and the population is starved for a decent differentiator.

There is a rise of young crowd who belong to the nouveau riche segment. They are being exposed to foreign brands and will definitely want to be part of it when the brand is available here. High on awareness, the crowd is ready and all geared up for the foreign brands.

So, here’s my view of the Indian buying pattern:coffee-cup-cupper

1. Brand

2. Price

3. Value

4. Variety

5. Service

The CCD advantage

It is a place filled with coffee and conversations. Young people, colors and a lot of noise characterize every outlet. Friendships come alive here. The menu is standard and so are prices. It is an inexpensive place to “hang-out.”

CCD merely provides a nice, ambient platform to meet. It helps the young crowd express themselves. The biggest differentiator of CCD is the price. They bundle fun and coffee at an unbelievable price. It’s a mass product.

Starbucks in India

We definitely lack a nice upscale chain of coffee shops. Probably the CCD crowd will stick on, but this will attract the growing crowd who hunt every corner for a different coffee outlet.

Also, Starbucks with all its customization possibilities, warm service and options that are alien to the Indian consumer, they will love it.

One big problem would be price. To create evangelists in India, the pricing may be a problem. If they retain the same pricing, they will definitely begin with a bang. But, they should restrict themselves to the metros and not more than 4 to 5 outlets in the country. No way, can they capture a larger crowd. Starbucks will manage to be another café-at-the-Taj and not a product that becomes a part of everybody life.

In spite of everything, I am sure there are a LOT of people here who would love to stop for a coffee before /after work to enjoy the cuppa, ideate, brainstorm and more. Well, we are talking about a company which enjoys higher sales per sq. foot than McD and also cares enough to provide health insutrance to all its employees (YES !! even part-time).

I think this is the right time for Starbucks to enter India. Crowd with the right outlook for coffee culture is growing big.

I want them in India. Do you?

I live in India now. There are no Starbucks outlets here. But, there has always been a doubt in my mind if it would work?
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