Under Narasimhan’s watch, the company is widening its India play.It plans to open one new store every three days in the country, taking its store count to 1,000 by 2028. Starbucks, which operates in India through an equal joint venture with Tata Consumer Products, currently runs 390 outlets in the country.
The former PepsiCo and Reckitt exec, who took over from Howard Schultz, recognises he has big shoes to fill. Schultz expanded Starbucks from a local Seattle chain into a top global brand. “Following an iconic founder, I learned a lot from Howard Schultz. My team and I are charting a new path forward. Our biggest challenge is how we continue to elevate the brand and partner experience so we can further exceed the expectations of customers. There are many things we need to do that are part of Triple Shot Reinvention Strategy which is focused on elevating the Starbucks brand; strengthening the company’s digital capabilities; and becoming truly global; customised with ‘two pumps’ unlocking efficiency and reinvigorating partner culture.”
India has caught the fancy of several big global brands – thanks to its young population, increasingly dictating shopping baskets of households and rising disposable incomes.
“Returning to India as the CEO of Starbucks has allowed for a ring-side experience of the rapid transformation India has undergone in the last decade. The infrastructure development here, booming consumer base and the widespread adaptation of technology translate to a prime opportunity for bolstering Starbucks stores as the third place between the office and the home,” said Narasimhan.
The international chain sure is a loved brand in India, but the market is getting competitive and the tall task for brands is to be able to keep up with the Gen Z and millennials, who often seek new and differentiated experiences. Apart from local players such as Third Wave Coffee and Blue Tokai Coffee Roasters, which are expanding their footprint, foreign brands Tim Hortons and Pret A Manger have also entered India.
Starbucks, Narasimhan said, will double down on investments across product innovation, store experience and digitisation. The challenge is not competition but to continue elevating the brand experience so that it can further exceed the expectations of its customers, the CEO said. “Our introduction of new and localised offerings is in response to shifting consumer needs and preferences, and we meet our customers where they are through differentiated experiences that cater to these evolving preferences. We recognise the unique cultural dynamics of the Indian market, where coffee is not just a beverage but a dynamic social experience, that involves human connection,” said Narasimhan in an email interview to TOI.
The local cafe market is expected to grow at a 19%-21% CAGR between FY23-FY28, touching Rs 7,800-8,200 crore, according to estimates shared by Crisil in a report published last year.
Leveraging the company’s existing footprint to serve customers with more purpose-defined stores and accelerated renovations will be key to Starbucks’ India strategy. “Our second reserve store introducing an intimate, multi-sensory coffee experience to customers will be opening later this year in India,” Narasimhan said. The firm will also tap aggressively into tier two and three cities, which are home to a wide set of consumers who have the purchasing power and are willing to explore new brands. Last year, for instance, Starbucks expanded into 24 new cities and added 71 new stores. In FY23, it surpassed Rs 1,000 crore in net sales in India. Narasimhan said that Starbucks is in India for the “long-term” and this is just the beginning. “Our winning strategy is the same as everywhere else – creating moments of human connection with our customers,” he added.
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