Smells like Starbucks: Coffee chain opens first India store in Mumbai

Coffee lovers in Mumbai have a new reason to cheer. Starbucks, the world's second largest coffee chain, threw open its doors to India on Friday night.

The Seattle-based company inaugurated its flagship store in India in the iconic Elphinstone building at Horniman Circle in South Mumbai.

It might take Starbucks years to offer as many as 80,000 varieties of beverages here as it offers in mature markets, but the company is betting on a strong coffee drinking tradition in India, which made it roast and sell coffee from Malabar in Seattle 15 years ago.

Tata Starbucks, the JV between Starbucks and Tata Global Beverages will open two more stores in Mumbai next week and one in Delhi next year.

The companies, however, remain tight-lipped about expansion plans in the country.

"India is a tough and complicated market. Finding real estate was not easy. With Tata's understanding of governance, real estate, it became easier for us, With one store now, we are poised to open many more in the country," said Howard Schultz, chairman, president & CEO, Starbucks Coffee Co.

The organised coffee market here is valued at around $200 million and is growing at 25% per annum, according to industry estimates.Challenges, however, are not new to Starbucks. Even in a traditionally tea-drinking market country like China, Starbucks persevered, and after 13 years of presence in that country, has 700 stores in the mainland, and over a 1,000 in Hong Kong and Taiwan.

"India is different. We view India as a long term opportunity to build a robust business," Schultz said.

The partnership with Starbucks will be extended to offer other products from Tata Global Beverages, including Himalayan water RK Krishnakumar, the company's vice chairman said.

Schultz said the company will look at opening stores in the major cities and expand into smaller ones in a few years.

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