Starbucks is starting to brew Indian stores faster and faster.
With India poised to become the world’s third-largest economy by 2030, Starbucks is doubling down on the burgeoning market.
Tata Starbucks, a joint venture between Starbucks and Tata Consumer Products, plans to operate 1,000 cafes in India, the company announced yesterday (Jan. 8).
Starbucks currently has 390 stores across India. To meet the new lofty goal, the coffee chain will need to execute one new store opening every three days, CEO Laxman Narasimhan said during a visit to India.
It sounds like a herculean task — but it’s only a little bit more of a push than what Starbucks has already been doing. “We have opened one store every five days,” Narasimhan said in a CNBC interview published today (Jan. 9).
Starbucks needs the push now more than ever. A win in India is especially crucial after China relegated the US-based coffee giant to the No. 2 spot there, behind the homegrown Luckin Coffee.
How will Starbucks scale up in India?
Starbucks had a first-to-market advantage back when it launched in 2012 at Horniman Circle in the posh south Mumbai neighborhood. Since then, it has moved into more than 50 Indian cities, trying to win overconsumers with local offerings like south Indian filter coffee and masala chai, as well as local food items like kathi rolls.
But stiff competition from local chains — New Delhi’s Barista, Gurugram-based Blue Tokai, and Bengaluru-headquarted Third Wave and Cafe Coffee Day — have clipped its wings a little in the world’s most populous country. In the last couple years, competition has heated up further with the entry of foreign chains like Canada-headquartered Tim Hortons and London-headquartered Pret a Manger.
Nevertheless, Starbucks says it’s ready to cast a wider net. After ticking its first island store opening in Alibaug, Maharashtra off the list last October, the coffee company is now targeting a heightened presence in Tier-2 and Tier-3 city outlets, as well as more drive-through, airport-based, and 24-hour cafes.
“The strategy focuses on skilling local partners for jobs, opening new stores that serve customers with an elevated experience, and promoting Indian-origin coffee to Starbucks customers around the world,” the company said a statement.
Starbucks in India, by the numbers
8,600: How much Starbucks says it will double its green-apron-donning employee headcount to by 2028 to support the growing footprint.
Five-day: Workweek Starbucks established for its employees, making it the first food and beverage company in the market to do so.
40%: Percentage of Indian Starbucks baristas who are women.
Three-fold: How much mobile ordering and ordering ahead for Starbucks India have grown, according to Adrit Mishra, COO of Starbucks India.
14%: Year-on-year revenue growth in the three months to Sept. 30, 2023 for Tata Starbucks — the slowest since the first COVID pandemic quarter in 2020, when it had to close all stores,
$2.24: Cost of the six-ounce drink, “Picco,” which Starbucks introduced in India in mid-2023 to woo more customers with cheaper prices. At the time, it also launched milkshakes at $3.33.
1: Starbucks Reserve store in India, located in Mumbai. Another one is due to open soon.
One more thing: Starbucks is collaborating with Manish Malhotra
Just as Starbucks partnered with K-Pop sensation Blackpink to launch a Frappuccino and limited-edition merch across the Asia Pacific region, it’s collaborating with a big Indian name within the next few weeks. There’s something brewing with ace fashion designer Manish Malhotra that’ll be out in a couple weeks, Narasimhan teased in his CNBC interview.