Cafe Coffee Day’s founder VG Siddhartha’s body found – was his assertion justified?

Desh Kapoor -

The Body of VG Siddhartha has been found.  He was missing for the past two days.  His disappearance has started a debate on the state of the economy and its impact on businesses across India.

Cafe Coffee Day's founder's body has been found. But his company's woes are because of a faulty and bad business model. Its demise was assured. Click To Tweet
Roughly two days after India’s biggest coffee chain Cafe Coffee Day’s (CCD) owner VG Siddhartha went missing, his body was found on the banks of Netravati River near Hoige Bazaar in Mangaluru on Wednesday. Coffee Day Managing Director and Chairman Siddhartha was missing since Monday night. (Source: DNA India)

Despite the assertions in the letter that is supposed to have been written by the CCD owner, the IT department has refuted the claims.

IN the past decades, it was customary for the rich and powerful to play with and game the Indian banking and financial system.  Even the stock market.

Suddenly, that is being taken away.  Order is being restored.  And law is being applied.  And that is what these businessmen and their paid journalists are calling “tax extremism”.

There is a structural shift happening.  It will take its toll.  But it is important and critical.

As for Cafe Coffee Day and its failing business.  Despite a revenue of 4,466.79 crore in FY19, its profit was Rs 127 crores.  Now, if you have ever gone to a CCD outlet you can understand that this franchise cannot last very long.  Why?  Because it’s business model is a failure when compared to Starbucks.  Let me put a few observations here:

  • The time taken to make one cup of coffee and wait for it is anywhere from 10 mins to 30 mins.  In that time, Starbucks would have service 5 to 15 customers at least.  At far higher price per cup of coffee.
  • Those who think CCD gives the experience, will know that its coffee is not that much better than Starbucks’

In per hour profitability, Starbucks beats CCD hands down any day.  With this kind of lethargic service and mediocre quality, its continuation was only predicated on lack of competition.  The moment that competition came in the form of Starbucks, its demise was assured.