Starbucks inaugurated its first store in India Friday in a historic building in southern Mumbai, as the Seattle-based coffee giant seeks growth in a market long associated with tea drinkers.
"It is perhaps the most elegant, beautiful, dynamic store we've opened in our history," chief executive Howard Schultz said.
After more than six years of studying the market, Starbucks is making a rapid-fire entry into Asia's third-largest economy. Coffee houses are still a relatively new trend in India, and the chains already in business sell cappuccinos and lattes below Starbucks' usual prices.
The company, in a joint venture with Tata Global Beverages, plans to open two additional stores in Mumbai next week in the Taj Mahal Palace hotel and the Oberoi hotel before launching in New Delhi early next year.
For the flagship Mumbai store, Starbucks chose the historic Elphinstone Building in the Horniman Circle neighbourhood of south Mumbai, not far from a vast Hermes shop and a stately local park maintained with funds from the family foundation of Italian designer Ermenegildo Zegna.
The flagship store, which can accommodate 120 people, is a cool, soaring space, with hand-carved wooden screens, thick tables of solid Indian teak, painted vintage trunks and old leather-bound books. Schultz said he hoped the effect would be like "walking into a shrine of Starbucks coffee."
The shop will offer free Wi-Fi and stay open until 11 p.m. Monday through Thursday and 1 a.m. on weekends, unusually late for Mumbai cafes.
The 42 menu items reflect local as well as Western tastes, featuring items such as Elaichi Mawa croissants - made with cardamom and milk solids - and tandoori paneer rolls. The prices position Starbucks at the premium end of India's coffee cafes, with a 12-ounce cappuccino retailing for a little over $2.
"We've been trying to in a sense crack the code here," Schultz said. The company decided early on they needed to enter India with a local partner, as they did in China.
Schultz said he spoke with many interested parties, but none "had the complete suite of things we felt were necessary to build a big, enduring business. That changed the day we met Tata."
Schultz came to India in November 2010 to begin "substantive conversations" with the salt-to-SUVs Tata conglomerate, which were followed by meetings in
Seattle and a January 2011 coffee-sourcing agreement with Tata Coffee. A year later, Starbucks announced it had formed a 50-50 joint venture with Tata Global Beverages called Tata Starbucks Ltd. At the time, the vice chairman of Tata Global Beverages, R.K. Krishnaku-mar, said the joint venture hoped to open 50 stores by the end of 2012 - a statement Starbucks has since tried to distance itself from.
The company won't comment on expansion targets, but Schultz pointed to Starbucks' presence in other markets as examples of the scale he is interested in.
There are more than 700 outlets in mainland China, he said, and 1,000 in Japan.
