THESTAR.COM Coffee chain joins with giant Tata group in $80M courtship of India’s increasingly rich urban youth. MUMBAI—Starbucks Corp., which last week signed a deal to open retail stores with India’s Tata Global Beverages Ltd., is banking on its brand’s attraction within a young and increasingly affluent middle class to face domestic competition and command higher prices.
“The middle and upper middle class in India is growing very fast in size and income,” said DK Joshi, an economist at Mumbai-based CRISIL Research. “It will be expensive coffee, but a growing number of people can afford it, and people who want to drink Starbucks will drink Starbucks.”
Brand appeal has already worked in China for Starbucks, which has opened up more than 500 stores there and just implemented its first price increase in five years. With an initial investment of about $80 million (U.S.), the world’s largest coffee chain and the Tata Group, one of India’s largest conglomerates, plan to open as many as 50 stores within 12 months on the subcontinent, starting with New Delhi and Mumbai this summer.
“The middle and upper middle class in India is growing very fast in size and income,” said DK Joshi, an economist at Mumbai-based CRISIL Research. “It will be expensive coffee, but a growing number of people can afford it, and people who want to drink Starbucks will drink Starbucks.”
Brand appeal has already worked in China for Starbucks, which has opened up more than 500 stores there and just implemented its first price increase in five years. With an initial investment of about $80 million (U.S.), the world’s largest coffee chain and the Tata Group, one of India’s largest conglomerates, plan to open as many as 50 stores within 12 months on the subcontinent, starting with New Delhi and Mumbai this summer.
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