Starbucks is warming up in India. After entering the country more than a decade ago, it plans to triple its store count to over 1,000 by 2028 and export an Indian blend to its U.S. stores. The ambitious expansion, unveiled on Tuesday, is emblematic of the country’s hope to attract foreign investment and increase exports. It also offers a reality check.
The coffee chain’s supersized presence is usually a useful mark of a country’s rising consumption, particularly in emerging markets. In India’s case, it underscores how the opportunity is moving beyond big cities like Mumbai and Pune, the hometown of Starbucks CEO Laxman Narasimhan. The $106 billion company’s push into the world’s fifth largest economy is unlikely to pay off for some time, however. Convincing professionals to splurge $3 on a cup of joe is tricky, many are equally happy with a 10 cent cup of street-side tea.
Moreover, India is still a tiny market compared to China, where Starbucks has over 6,000 stores and opened 785 alone in the year to October 2023 – more than twice its entire India footprint. The U.S. company’s India plans deserve to be celebrated but it is still very early days. (By Una Galani)
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