Starbucks JV in India opens two more stores in Mumbai, taking number of Starbucks in India to three
October 27, 2012
(Dow Jones Newswires)
– Starbucks Corp. (SBUX) said Friday its joint venture with the Tata group has opened two more stores in Mumbai, taking the number of Starbucks cafes in India to three.
The Seattle-based coffee retailer opened its first cafe in India last Friday at a historic building owned by the Tata group in Mumbai's Horniman Circle area.
Of the two new cafes, which it opened on Wednesday, one is located at the Tata group-owned Taj Mahal Hotel & Palace in south Mumbai, Tata Starbucks Ltd. said in a statement. The other store is located at the Oberoi Mall in Mumbai's western suburbs.
India is one of last untapped markets for Starbucks, which has operations in 61 countries.
Starbucks Chief Executive Howard Schultz said last week that India and China would be the largest growth markets for the company.
Tata Starbucks was set up after Starbucks this January entered into a joint venture with Tata Global Beverages Ltd. (500800.BY), a unit of the Tata group conglomerate, to open its cafes in India.
At the time, Starbucks said the two companies would start with an investment of $80 million, adding more funds as needed. It also said it planned to set up 50 stores by the end of this year.
The company is behind schedule and now won't disclose the number of stores it plans to open in India.
While India is a nation best known for its tea drinkers, coffee drinking is becoming increasingly popular. Domestic consumption of coffee rose to an estimated 108,000 metric tons in 2010, up 80% in the past decade, according to government figures.
India sees about $230 million in revenues from cafes, a figure that will likely grow 13%-14% annually over the next five years to about $410 million, estimates Technopak, a New Delhi-based consultancy.
There are currently 1,950 cafes in India, two-thirds of which were added in the past five years, says Technopak. It estimates that another 1,000 will be added over the next five years.
Starbucks rival Dunkin' Brands Inc. last year entered into an agreement with an India-based company to open up to 30 Dunkin' Donuts outlets over the next three years. It opened its first cafe in New Delhi earlier this year and now has five cafes.
Write to Rumman Ahmed at email@example.com
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