Rasul Bailay & Ratna Bhushan
If Starbucks to you means the ubiquitous chain that sells coffee on the go through hundreds of small stores all over the US, its Indian avatar might come as a bit of a shock.
The world’s largest coffee chain is positioning itself as an aspirational brand in this tea-drinking nation, and is going over the top with its stores, some of the plushest it’s opened anywhere in the world. “We believe a coffee house should be a welcoming, inviting and familiar place for people to connect, so we design our stores to reflect the unique character of the neighborhoods they serve,” a Tata Starbucks spokesperson said in an emailed reply.
Starbucks entered India in October 2012 through an equal joint venture between the Seattle-based retailer and Tata Global Beverages. The alliance has opened 15 stores in India so far – in premium locations like Horniman Circle, Colaba and Bandra in Mumbai, Connaught Place in Delhi and Koregaon Park in Pune. Experts say it’s following the same strategy it adopted in China, where it opened in prominent locations to increase visibility to consumers. A person familiar with Starbucks’ India strategy, who asked not to be named explained, “Right now, the idea is to familiarise Indians with Starbucks.”
Research on the coffee chain showed that for Indian consumers, coffee is not the primary reason to visit a cafe – and very few order a beverage to take away with them. Most consumers spend about 45 minutes in a cafe, using it as a spot to meet friends and relatives.
So, Starbucks wanted its stores to be as appealing as possible while giving consumers a unique “Starbucks experience”, the person familiar with Starbucks plans said. That meant stores in India don’t fit the global design template – each store has been designed differently, with “local” touches incorporated. For example, the store in New Delhi’s Connaught Place has ropes and chatai on the walls and henna patterns on the floor, with pictures of Indian spices on its walls. The store in Select Citywalk mall has locally-crafted wood paneling, while the Pune store incorporates localised railings and a rich display of antiques and copper.
“The idea was to bring about the traditional elements of this country and present them in modern settings,” said the person quoted above. This is an experimentation phase, and Starbucks will eventually reach a standard format and design for its Indian outlets. Darshan Mehta, the chief executive of Reliance Brands, says he has so far visited four Starbucks outlets in Delhi and Mumbai. “They are beautiful in terms of shape, size and coziness.
The Horniman Circle store is truly the high-end of Starbucks spectrum,” he says. Along with its locallysourced coffee, the outlets offer an Indianised food menu – with items like murg kathi wrap, wasabi kotumbwadi and chicken makhani pies next to the English muffins on offer.
“Our stores are designed in-house and the mission of each designer is to create a spectacular third place that is steeped in the local culture and designed to reflect the unique characteristics of each neighborhood,” the Tata Starbucks spokesperson said.
However, rival coffee chains don’t think this strategy is sustainable. “They would definitely like to make a statement through the first fifty stores. It’s very likely that later they will look at kiosks and routine stores,” says the marketing head of a rival coffee chain. “As far as their store ambience goes, they are overdoing it,” he added.
The chief executive of another rival coffee chain agreed. “The focus and investments on ambience and store location is obvious. Many of us don’t have the bandwidth to invest so much on ambience,” he said, asking not to be named.
Prices at Starbucks are in line with the premium store strategy: the chief executive of the rival coffee chain quoted has noted that Starbucks has increased prices for its food and beverages by as much as 20% in three months. “It’s an unprecedented move; most of us (coffee and quick service restaurants chains) are focusing on value and giving combo deals to consumers. Starbucks has done the opposite.
Maybe, they can pull it off because of their deep pockets, but we can’t afford to take up prices and alienate consumers who are anyway looking a value deals,” he said, asking not to be named.
Source:The Economic Times
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