Starbucks Enters India.

Finally, after a lot of wait and hand wringing, Starbucks has opened its first store in India.  With 4,000-square-foot, two-level store in historic Horinam Circle Starbucks opened a new chapter in India’s beverage market.  A country where one can get great Chai for Rs 10 even now will have stores which sell a bastardized and Westernized version for over 10 times that.

The expansion plans of Starbucks are very modest now than earlier.  This year Starbucks will open only 2 more stores in Mumbai and then open its first store in Delhi early next year.

Personally, I think the Indian companies-owned cafes have a fairly good ambiance and also a good set of choices, so why would one go for another one?   For me the answer is speed and service.  The Indian cafes are EXTREMELY slow in turning around your order.  If you order one Cafe Latte, it can take upto 30 mins to come!  In Starbucks that’s under 2 mins, with similar or better ambiance and taste!  That’s where the rub will be.  If Starbucks can make and sell more cups of beverage per hour than other Cafes and yet retain that experience, then it can beat the Cafe Coffee Days and Baristas hands down!

Starbucks also seems to have worked out an aggressive pricing strategy to tackle the already entrenched players.

The company will sell its beverages at lower prices than it does elsewhere and than many of its competitors do in India. A “short” black coffee, for instance, will sell for 85 rupees ($1.57), which, while more expensive than local chains like Café Coffee Day, is cheaper than comparable beverages at other foreign chains like Coffee Bean & Tea Leaf. The company will also offer food items like a cardamom-flavored croissant and chicken tikka panini meant to appeal to Indian palates. The store will also offer free wireless Internet service.

The beans used in Starbucks will be from Tata Coffee, and Starbucks has worked to create a special Indian blend in Seattle.