Starbucks in India: Taste trumps price as fans rush in

April 4, 2013

(Any opinions expressed here are those of the author and not necessarily of Reuters)

The excitement on Garima Bajaj’s face is evident as she finally “makes it” to Delhi’s first* Starbucks store after dropping out of the queue twice before.

“Patience is always a virtue. It’s always good to wait,” the management student from Gurgaon said.

It’s been two months since the first Starbucks store opened in Delhi’s Connaught Place. The euphoria is far from over, judging by the queues outside.

“I really like the visual appeal of the place. I am used to the simple arrangement in Barista, CCD (CafĂ© Coffee Day) or Costa. When you enter (the store), it’s very impactful,” said Pawni Singh, a Delhi University student.

Indeed, the interior of the Delhi Starbucks store is impressive: walls adorned with craftwork, including a large map of the Indian subcontinent, chandeliers made of jute, coffee-brown wooden panels and below — a babble of voices as fans, mostly young people, savour the taste of the newest coffee brand in town.

(Read interview with Tata Starbucks CEO Avani Davda on the coffee chain’s progress in India)

“Coffee is unique (at Starbucks), better than others. I used to go to CCD, but my first preference would obviously be Starbucks now,” said engineering student Gaurav Arora.

But for Nemat Kaur, a student, Starbucks may not be the top priority. “It feels like a reasonable amount, but if you’re going to pay that every week, it would take a toll on you as a student.”

A Starbucks small cappuccino costs 95 rupees (nearly $2). So does a Costa Coffee. Its equivalent costs 61 rupees (just over $1) at CCD, India’s largest coffee chain.

At the Starbucks outlet in Mumbai’s Goregaon, 20-year-old Shipra said she is disappointed. “It’s very expensive. I thought it would be competitively priced. But it’s not.” Mumbai has six Starbucks stores. The first opened last year.

Captain Umesh Bhatia, who works in the merchant navy, is among those who don’t mind shelling out extra bucks for a Starbucks coffee. “I agree that we’re paying more, but it’s for the coffee and the taste.”

In Connaught Place, the Starbucks coffee shop is the busiest and probably the biggest in the area. But competitors of the world’s largest coffee chain are unruffled.

“For CCD, it has always been business as usual irrespective of new players. More players help expand the industry and the Indian market has enough space for all players to co-exist,” said CCD’s marketing president, K. Ramakrishnan.

Costa Coffee’s India CEO, Santhosh Unni, said, “A new brand entering India always has a novel effect. It’s something to do with the temperament of the Indian consumer — to experiment.”

(Sankalp Phartiyal in New Delhi and Shilpa Jamkhandikar in Mumbai contributed to this blog)

(*Two Starbucks stores have opened in south Delhi since. There are two separate outlets at the city airport)

(Follow Ankush on Twitter @ankush_patrakar )

No comments so far

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/