Starbucks launches first cafe in India

Starbucks, the world's biggest coffee chain, launched its first Indian outlet Friday in an upscale part of Mumbai, becoming the latest global firm to tap the urban youth's growing taste for caffeine.

The Seattle-based firm has finally entered the vast Indian market in a joint venture with the country's giant Tata conglomerate -- with menus especially adapted to appeal to local tastes in a country better known for its tea.

Speaking at the launch, the company's chairman and chief executive Howard Schultz described India as "one of the largest markets in the world for Starbucks" and pledged that prices would be competitive.

"The competition here is ferocious. We're coming here priced to succeed, to make it as accessible as possible," Schultz told reporters at the new two-storey cafe in south Mumbai's Horniman Circle, also home to a luxury Hermes store.

Like other Western chains that have come to India, such as Pizza Hut, Starbucks is offering "Indianised" versions of its staple hot drinks and baked goods to appeal to local palates.

Items on the menu include a murg tikka panini, cardamom-flavoured elaichi mawa croissants and Himalayan mineral water.

The usual Starbucks varieties of coffee are available but some of the beans have been sourced from Tata estates in India.

The price of a medium-sized cappucino is 115 rupees ($2.15) while a caffe americano costs 110 rupees.

"We're trying to be respectful of Indian culture," said Schultz.

"I say with humility we must earn the respect of the Indian customer. We're not coming here taking anything for granted but certainly we intend to succeed here."

India has traditionally been more of a tea-drinking nation, but the coffee bean's stature is shooting up among young and urban professional classes, who seem drawn as much to Western-style cafes as they are to the drink itself.

Starbucks will compete for their rising disposable incomes with Indian-owned Cafe Coffee Day, which dominates the market, and well-established foreign chains such as Britain's Costa Coffee and US Coffee Bean and Tea Leaf.

But the new entrant is likely to be successful, in part thanks to being a very well-known brand globally, said Pratichee Kapoor, associate vice president in food services and agriculture at Indian consultancy Technopak.

"Starbucks provide a very good space between a cafe and a five-star hotel, if I don't want to spend as much as at a five-star hotel," Kapoor told AFP.

India's cafe market, estimated at $230 million this year, is expected to grow about 13-14 percent over the next five years, according to a Technopak report ahead of the Starbucks launch.

In the last five years, 1,250 new cafes have popped up across the country, and another 1,000 are expected by 2017, the report said.

Company officials remained tight-lipped at Friday's launch on how many cafes were planned, saying that two more were coming up in Mumbai in the next week and they would start operating in New Delhi next year.

"It's a very good socialising platform for people, this cafe market. It welcomes people to spend time and to have a good time. It's very attractive to young people," Kapoor said.

Among India's 1.2 billion people, the average age is under 30, giving it one of the world's youngest and biggest workforces.

Though many of them may be drawn away from traditional "chai", it was business as usual on Friday for tea seller Narayan Gujjar on a street of south Mumbai's business district, where his customers gathered to sip and chat.

Stirring his steaming mix of the spicy brew, he said he had never heard of Starbucks and was unruffled by the competition.

"I have my fixed customers, they will come," he said.

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