INDIA BUSINESS WORLD - OCTOBER 2006
THE MONTH THAT WAS...

STARBUCKS BREWS INDIA STORY WITH BIYANI

 THE world's largest coffee chain, Starbucks, is finally here. The Seattle-based iconic brand is learnt to have signed up with Kishore Biyani's Planet Retail Holdings (formerly Planet Sports) to enter India, putting to rest speculations about its partner in the country.

   Planet Retail will be the master franchisee for the Starbucks brand in India and other south Asian markets. It is already the licensee for Starbucks in Indonesia. The first Starbucks outlet will open in India early next year. The other modalities of the deal are still being worked out.

   Planet Retail Holdings MD Arun Bhardwaj was not available for comment. “The company can't comment on this issue as of now,” said an official e-mail sent by Planet Retail Holdings.

   The $6.4-billion coffee chain's India strategy has been a matter of great interest and speculation, as company officials have been making routine visits to the country twice a year. It has been in talks with various Indian companies for almost three years, prominent among them being the Rahejas and RPG group. Sources said discussions had also reached advanced stages with the Anil Dhirubhai Ambani Group (ADAG).

   Meanwhile, the company was all along hoping that India would allow FDI in retail; so that it could come on its own. However, foreign investment in retail is still not high priority for the government, and Starbucks cannot afford to miss the consumer boom in India.

   Earlier this year, Starbucks chairman Howard Schultz had said, at the company's Q3 result conference, “We are equally excited about two other major markets we intend to enter during 2007 — India and Russia... We are in discussions with potential joint venture partners in each of these markets. Meanwhile, we are scouting for locations, meeting government officials — all for gaining additional market knowledge and building critical relationships to make our market entries a success.”

   Commenting specifically on India, Mr Schultz had said, “As the world's second most populous country, with more than 1 billion people and growing at 6% per year, we see unique and great opportunity for bringing the Starbucks experience to this market.”