The Hindu Business Line : Starbucks Coffee firms up India plans

The Seattle-based coffee chain whose outlets are considered destination hangouts, is believed to be negotiating with a Mumbai-based realtor to enter the metro markets where a large chunk of its target audience exists.

Boston , May 26

Gourmet coffee major, Starbucks Coffee Company, has firmed up plans to enter the Indian market within the next 18 months as part of its plans to expand its global footprint. "We are excited about the great opportunities that India presents to the company. We are looking forward to offering the finest coffee in the world, handcrafted beverages, the unique Starbucks experience... to customers in this country within the next 18 months," an official spokesperson told Business Line. The company, however, declined to give further details of its India plan. "It is too premature to identify the cities in India that Starbucks will initially enter due to the fact that we do not have any announcements to make regarding this market at this time," the spokesperson said.

Starbucks has ambitious growth goals for coming years and it is eyeing markets where it currently does not have stores for potential expansion. Its list of potential markets includes Russia, Italy, India and Brazil. The plan is to eventually operate 15,000 stores at home and another 15,000 abroad, increasing revenue 20 per cent and profit at a20-25 per cent clip annually over the next three to five years.

The domestic organised coffee retail market is currently dominated by CaféCoffee Day and Barista and has recently seen global names such as Costa Coffee and Gloria JeansCoffees announcing their entry into India with local partners.

While rumours of the coffee chain's entry into India has been the subject of much speculation in the market over the last few years, Starbucks Chairman, Mr Howard Schultz, recently went public with its aggressive move into international markets including China.

During a speech at the Detroit Economic Club, Mr Schultz said the company's goal is to make China its second biggest market behind the US. He said Starbucks currently has 200 stores in the country, compared to 7,600 in the US. It has more than 3,000 stores in non-US markets.

Performance

The company recently reported record fiscal second-quarter revenue and earnings and raised its full-year guidance. Revenue for the period ended April 2 rose 24 per cent from the year-earlier period to $1.9 billion, helping boost net income to $127.3 million.