Well Starbucks is finally here in India, the first Starbucks cafe opened in Mumbai this October followed quickly by 2 other cafes in the city. To be quite frank & honest, I honestly didn't think Starbucks would be able to find it's place in the Indian market, as the average Indian palette has a greater inclination towards tea rather than coffee. Not only that, the price of your average Starbucks coffee is ridiculously over-priced in most countries, if you consider PPP (Purchasing Power Parity) of money in these countries in which Starbucks is present in.
But all these initial apprehensions seem to have been answered quite brilliantly by the Starbucks management. If you consider where the cafes have been setup, they all are in locations in which the local residents have greater amounts of disposable income, especially in south Mumbai, so close to causeway & the Taj hotel has to be a brilliant location for Starbucks to cater for its target market of Foreign citizens, High level executives & rich brats. The ambiance provided by Starbucks also gives you the real feel like you are in a proper Cafe that we are so used to see in movies & TV shows, its very calming & very relaxing. Pricing seems to be similar to Barista (which is struggling), Costa Coffee & Coffee Bean & Tea Leaf. So its pretty safe to say that they are not wasting time on a mass market strategy & only looking at the niche market.
Now from my personal experience the coffee & frappucinos were pretty diluted, granted the quantity was value for money, even the smallest frappucino is pretty filling. The food products like muffins, sandwiches etc are pretty good, though slightly pricey(starting at around Rs. 100) are still value for money.
Starbucks Mumbai
Another thing I found a little stupid was the size variations that Starbucks offers are - Tall, Grande & Venti (instead of Small, Medium & Large). All of them are synonyms for large, guess its a strategy to make their customer feel like they are getting more value than they actually are.
All in all the decisions the Starbucks top management made while entering Indian markets seemed to have been spot on, including entering India through a Joint Venture with Tata Tea was also a brilliant idea.
One of the concerns I heard from an American visiting India a couple months ago was that if Starbucks takes over the Indian markets, like it has abroad. What would happen to the local "chai-wallas"?? I honestly feel that both can co-exist as the target market segments for both are very different. In fact the possibility of overlapping customers just does not seem possible. Lets see what the future has in store for Starbucks in India as of now with the huge queues waiting outside their cafes, it seems their initial steps in India have been very successful.
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