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Starbucks set to sip like an Indian; to serve tea brand Teavana in country soon

Mail Today Bureau     January 15, 2016

Starbucks is bullish on India and sees a major business opportunity in the country. Starbucks, which operates in India under a 50:50 joint venture with Tata Global Beverages and runs 75 outlets across seven cities under the label of Tata-Starbucks since October 2012, will bring its international speciality tea brand Teavana to India this year.

"We see a major, major business opportunity here ... In 2016, we intend to bring our speciality tea brand Teavana here, which we acquired in the US two years ago," Howard Schultz, chairman and chief executive officer, Starbucks, told the media here on Thursday. "One of the areas where we have grown significantly and become the best in class is social media. We have built tremendous value in that, and we'll start to bring it here next summer," Schultz added.


Schultz admitted that Starbucks has not been a research-driven organisation so far, but better at collecting consumer data. However, he pointed out that success in a business has to be earned, and reputation is everything. "Globally, Starbucks is also building a significant presence in the consumer packaged goods segment, where it sees a bright opportunity."

While adhering to a standardised retail model, Starbucks also has to balance local requirements, Schultz said, adding, "We have more 75 outlets in 7 cities under the label of Tata-Starbucks than 23,000 stores in 73 countries and many market requirements are different. Here our stores are incredibly different, and highly relevant to local culture."

On the company's culture, Schultz said that Starbucks is very employee-centric, and the key to reducing attrition levels at stores is to invest in them ahead of the growth and profit curve. "It is important to invest in employees before we have economies of scale." The interaction was also attended by senior executives of Tata Sons.

Though the company had said at the launch that it would open 50 stores in the first year of operations, in over three years it has reached only 75. Schultz and Tata officials did not speak about the India business plans.

Referring to the race between India and China, Schultz said that each is going through its own transformation, and the fast rising middle-class population here provides a great market opportunity.

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