Starbucks & India’s Beverage Bubble

Times of India:

At the Starbucks headquarters in Downtown Seattle, there is an enormous scoreboard that keeps count of the number of stores the American beverage chain has opened across the world – some 13,000 in 40 countries at last count. The entry against India reads: Coming soon.

It’s been like this for a while, and it looks likely to stay that way for some time. Last month, Starbucks postponed its entry into India and officially withdrew its application to operate single-brand retail stores, without citing reasons. The scuttlebutt in the market is that the Seattle superstar got filtered as it tried to enter India through an NRI franchisee instead of the government’s preferred FDI route.

One reason Starbucks has had a stop-start issue in India is because it was tailgating smaller Indian coffee chains who got a head start, perhaps anticipating the arrival of the Seattle giant.

Companies like New Delhi upstart Barista and Bangalore’s Coffee Day have first mover advantage with scores of outlets already running. Evidently, Starbucks wanted to buy out one of them but found they were too pricey. Read more.