Starbucks Corporation is set to dramatically expand its presence in India, planning to double its store count to 1,000 by 2028. This ambitious growth strategy, equivalent to opening one store every three days, is driven by the surging coffee consumption trend propelled by India's growing middle class. The company aims to focus its expansion on tier-2 and tier-3 cities, extending beyond major urban centers, and also intends to boost its presence through drive-thrus, airports, and 24-hour cafes. The plan includes doubling its Indian workforce to 8,600 employees.
While India has traditionally favored tea, particularly sweetened chai, coffee consumption has gained popularity among aspirational consumers, leading to the proliferation of high-end cafes and local chains like Blue Tokai. Starbucks, operating in India since 2012 through a 50% joint venture with Tata Consumer Products, currently has 390 stores across 54 cities.
CEO Laxman Narasimhan, visiting India, noted that over the past 11 years, the Indian market has become one of Starbucks' fastest-growing markets, attributing this growth to the evolving coffee culture amidst the expanding middle class. The company's broader goal is to increase its foothold in economically promising markets globally.
The move reflects Starbucks' confidence in India's potential, given the country's economic growth and changing consumer preferences. However, challenges include the prevalent preference for instant coffee at home and the relatively small size of the premium coffee market, accounting for about a third of total consumption. Despite potential hurdles, Starbucks sees India as a key market for future growth, even as it remains dwarfed by its extensive presence in mainland China, where it operates more than 6,500 stores.