Can Starbucks make it in India?
The unquenchably ambitious coffee chain opens its first store in the world's second-most-populous nation. But it faces some cultural challenges.
On Friday, Starbucks (SBUX) opened its first outlet in India, a cavernous, two-story building in a swank Mumbai neighborhood.
The store is part of the chain's broader push to expand its presence in emerging markets -- seen as the most promising areas for growth, given Starbucks' super-saturation in the States and Europe's entrenched cafe culture.
But breaking into new countries requires a little more finesse than simply showing up, as Home Depot (HD) recently learned in China.
Here's a guide to Starbucks' foray into India:
How does India's Starbucks differ from the company's other stores?
For one thing, the coffee is made "from beans grown and roasted in the country," giving local customers a "distinct Indian blend," says Vikas Bajat at The New York Times. In addition, the menu is tailored to Indian tastes, featuring items like Chicken Tikka Panini, Elaichi Mawa Croissant, and Tamarind Peanut Chicken Calzone. "The trademark Chai Tea Latte is in the menu," say Meghan Bahree and Margherita Stancati at The Wall Street Journal, "although . . . to Indian ears, this (translates as) 'tea tea latte.'"
Does Starbucks have big plans for India?
It did. As recently as January, "Starbucks and its Indian partner, the Tata Group, announced ambitious plans to open 50 stores in the country by the end of the year and speculated that they could one day have as many as 3,000 outlets here," says Bajaj. However, those goals have been scaled back, with current ones calling for two more Mumbai stores before the end of this year and one in New Delhi, the capital, by early 2013.
What is holding Starbucks back?
The company is apparently just being careful. "Most Indians still begin their day with a steaming cup of milky, sweet chai," says Pamela Boykoff at CNN, and it's unclear whether their taste for coffee will grow. Plus Starbucks' profit margins in India are smaller: It's selling its products at a significant discount so prices are more in line with Indian standards. Starbucks does not shave prices at its franchises in China, which is expected to become the company's second-largest market in a matter of years.
So can Starbucks make it in India?
Some analysts are optimistic. At least one report estimates that the Indian coffee market could double in the next five years, hauling in more than $500 million. And Indian consumers -- hungry for clean, safe places to get together with friends -- may view Starbucks more as a hangout spot than a purveyor of coffee. "You could be selling lemonade in Starbucks in India and people would still come," analyst Arvind Singhal tells CNN.
More from The Week
SANCTONS AGAINST U N COUNTRIES FOR INVASION OF PRIVACY- THEFT OF NATIONAL AND INTERNATIONAL
RIGHTS TO USE LOGO- OR BUSINESS CONCEPTS INCLUDING MACYS-
THE INTERNATIONAL COMMUNITY HAS ESTABLISHED WSITHIN THE BORDERS OF THE UNITED STATES ASSISTED BY POLICE ANDS SURVEILLANCE - TO RETREIVE AND GATHER INFORMATION TO USE AS BUSINESS IN OTHER COUNTRIES
STARBUCKS ORGANIZATION IS IN VIOLATION CHARGES WILL BE FILED IN WHITE PLAINS NEW YORK WHERE THE FIRST STARBUCK-CIRCLE- FOUNTAIN - WE INSTALLED WITH OUR FUNDS- NO ONE HAD PERMISSION TO OOPEN ANY OTHER FRANCHISES- THE SECOND STARBUCKS WENT TO 125TH AND LOWER MANHATTAN
WE OPENED ON OUR PROPERTY
EXCUSE ME STATE DEPARTMENMT- WHY ARE THE MOSLEY -KUNSTLER FILES SO IMOPORTANT
OWNERS OF STARBUCKS- STAR AND BUCKWILE-MOSLEY- INFRINGEMENT OF PATTENT-COPYRIGHT- ILLEGAL - UN AUTHORIZED USE OF NAMEANTI TRUST VIOLATIONS WILL BE PROVEN
ALL FRANCHISE EXPANSION HAS BEEN ILLEGAL - OPTING TO LEAVE OUT STATE AND NATIONAL PLANNER INFORMATION WHO PLANNED ENTIES IN EVERY STATE FOR STATE REVENUE AND CONTINUING EDUCATION
THIS INCLUDES- WENDYS-FOOT LOCKER-MARSHALLS- TEARGET-T J MAX-SYMS-LORD N TAYLOR- BERGDORF -LADY TIMBERLANDS-COACH-GUCCI-LOUIS 'VERCACCE- MCDONALDS- KFC- SHONEY BIG BOY- HARDYS- APPLEBYS- OUTBACK-MANNAS-STAR RESTUARANTS- CHINESE FOOD- 137TH STREET NYC- FISH -FOOD- STEAMERS PALCED AND DESIGNED BY RAS TEAM-
REPRODUCTION OF PATTENTS HAVE CAUSED AMERICAS DEMISE-
WE CLOSE THE WRONG EYES AT THE WRONG TIME ALLOWED LAYMEN TO USE OUR STRENGHT- AND TAKE CONTROL OF A CAMERA WHICH FOOLED THEM-
Copyright © 2014 Microsoft. All rights reserved.
These hot movers could rise by double digits in coming months.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.