The world’s largest coffee chain will need options that are priced as much as 33 percent lower than its U.S. offerings to succeed in the Indian market, said Saloni Nangia, president at Gurgaon-based consultancy Technopak Advisors Pvt. The company opens its first outlet in the country today with partner Tata Global Beverages Ltd. in an upscale south Mumbai neighborhood that also boasts a Hermes store.
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Starbucks is entering the world’s second-most populous nation as part of a plan to counter slowing growth in the U.S. and a recession in Europe. The U.S. accounted for less than 70 percent of its sales last fiscal, according to data compiled by Bloomberg. In India, where consumption of the drink has almost doubled in the decade through 2010 to 108,000 metric tons, the chain will compete with Barista Coffee Co., a unit of Italy’s Lavazza SpA, and Cafe Coffee Day, run by Amalgamated Bean Coffee Trading Co.
“It’s a great time for Starbucks to come in because some of the base is already here, in terms of cafes, in terms of people using them as socializing hotspots,” said Nangia. “The average Indian consumer, or the current cafe consumer, is happy to upgrade to a Starbucks environment.” Read more >>