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We want to grow respectfully

After entering the Indian market in October 2012 through a joint venture with Tata Global Beverages, US-based Starbucks Coffee Company has expanded briskly, opening 15 outlets in Delhi and Mumbai.

After entering the Indian market in October 2012 through a joint venture with Tata Global Beverages, US-based Starbucks Coffee Company has expanded briskly, opening 15 outlets in Delhi and Mumbai. In an exclusive interview, Avani Davda, the 33-year-old CEO of Tata Starbucks, told FE?s Vaishnavi Bala that the company has ambitious plans for India but the expansion will be well thought-out. Excerpts:

The coffee space in India is getting crowded. How is Starbucks differentiating itself?

I would say that we are changing the way coffee houses are defined in India. And we are making that shift because people do realise that the brand has a history of being a coffee connoisseur. There is a lot of passion in the brand. We are creating this environment where one can find globally relevant food, coffee as well as tea, and with this we have hit the right spot. I am very bullish on the coffee segment. It has shown double-digit growth in the past, and will continue to grow that way.

Tata Starbucks has opened 15 stores in eight months. Are you looking at similar momentum going ahead? How many more stores are there in the pipeline?

Yes. Fifteen stores is a milestone we celebrate, but we have ambitious plans to grow in India. Our momentum would depend on how the market wants us to grow. We are not in a hurry to put our flag and give a number to how many stores we would like to open. We want to grow thoughtfully and respectfully. And that will take time as we develop the food menu and design stores. I am not in a hurry to quote a number. We are not looking at business that way.

The joint venture between Tata and Starbucks inherits strong parents. The two companies are looking at India as a very ripe market for growing this business. There is a long-term view in terms of the investments we will make. It is not only about building stores or getting consumers. That is easier to do. If that were the case, Starbucks would not need Tata for it. We are here for the long term.

Are you looking at lowering prices?

We are not going to get into the gimmick of giving something cheap so that customers come in. That is not our objective. Starbucks’ objective is to be a place that gives a premium coffee experience. When we started off, our initial response was that people are willing to spend if they see value in the offering. We need to get out of the mindset that Indian consumers are always looking for something cheap. We recognise that we need to give them value offerings.?

By when do you expect to break even?

I would not comment on when we would break even. But I would say that we are backed by parents that are conscious and responsible. Currently, the focus is to see that the brands are built correctly.

What challenges do you face in the Indian market?

Retaining people is something that is very important for us. It is an important business area for us to train and develop employees as the brand stands on that. Also, trials made by consumers now need to translate into repeated visits. It cannot be a fad, and has to be long-term.

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First published on: 13-06-2013 at 02:02 IST
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