Markets that are currently in full development represent for the big companies a temptation they can’t shake off and sooner or later they try their best to expand their business. It is exactly the case of Starbucks, company which decided to bring the famous cafes in India too, thanks to a partnership with Tata Global.
Today, Starbucks made the first step to enter a market a lot of companies dream of. The market in India is currently booming and a lot of Western companies would like to own a share. Thus, to gain easier access to the Indian market, Starbucks has decided to sign an agreement with Tata Global Beverages Limited.
Foxbusiness.com writes that recently, consumers in India have started to shift from the traditional tea towards the espressos and cappuccino at quick service cafes. According to data from the government, domestic consumption of coffee rose to an estimated 108,000 metric tons in 2010. Compared to the figures ten years ago, the consumption has raised 80 percent.
The partnership between the two big players will materialize as a joint venture, which will be known as TATA Starbucks Limited. The 50/50 joint venture will own and operate Starbucks cafes branded as Starbucks Coffee “ A Tata Alliance”.
John Culver, president Starbucks China and Asia Pacific, said: “We’re very pleased to have found the best partner for Starbucks in Tata – a company that shares so many of the same values for conducting business in a way that earns the trust and respect of our customers and partners”.
According to the press release, the Starbucks & Tata branded stores will be developed all across the country, beginning with stores in Delhi and Mumbai by the end of this year. Starbucks Chairman Howard Schultz said in January 2011 that India has the potential to become China’s rival one day.
As stated by the press release, Starbucks will do that “by offering high quality Arabica coffee, handcrafted beverages, locally relevant food and legendary service”.
Starbucks will enter a market where Café Coffee Day, Luigi Lavazza and Costa Coffee are already thriving and being known as leaders in the market. Saloni Nangia, senior vice president of Technopak Advisors consulting firm, estimates there are 2,000 – 2,200 coffee cafes throughout India at the moment.