Team Starbucks Glocalization in India 1 #TeamStarbucks was shocked upon entering Starbucks’ flagship store on Connaught Place in New Delhi. The decor was drastically different from the Starbucks’ Chinese location. Gone were the images of African and Latin American coffee farmers. Gone were the kitschy posters of Italy and Rwanda. Gone was any indication that Starbucks was an international company. Instead, this Starbucks projected a hyper-local image; almost all the decor was “Indian” and sought to convey the idea that Starbucks is an Indian company. This drive is rooted in two factors: India’s history of colonialism and Starbucks’ need to compete with Cafe Coffee Day, the more-established coffee chain in India. 1. Located above the milk-and- sugar station — the site of international murals and environmental information in Starbucks’ Chinese outlets — these images of “local craftsmen creating” are central to Starbucks efforts to appear Indian. 2. As the product of these “local craftsman,” this prominently displayed woven rope structure makes physical the “Starbucks is Indian” implication that the previous images only suggested. 3. A melange of vaguely Indian antiques and faux-distressed Starbucks bags, this display attempts to deepen this linkage by situating Starbucks not only in local context but also in a historical context. This area was also the site of many group pictures taken by excited customers who appeared to be visiting Starbucks for the first time. 4. This image of an Indian coffee farmer is a marked change from the African and Latin American farmers seen in Starbucks outlets in China and America. It seems designed to remind Starbucks’ Indian customers that all of the beans used in the company’s Indian outlets are sourced from India. 5. The unfinished walls and painted logo mark a dramatic aesthetic departure from Starbucks’ polished Chinese locations. As with the other aspects of the decor, they provide Starbucks with a history it lacks. 2 3 5 4 Cafe Coffee Day Unlike in China, Starbucks is not the most-prominent chain of coffee shops— not by a longshot. In India, Cafe Coffee Day (or CCD, as the young people of Delhi affectionately call it) opened in 1996 and dictated the rules of coffee shop culture in India. With their Indian color schemes, quirky local advertising, and renowned India-only vertical integration, CCD promotes itself as a distinctively Indian enterprise. Cafe Coffee Day’s success explains why Starbucks’ branding in India is so focused on creating linkages with Indian culture. 1. Cafe Coffee Days come in all shapes and sizes, from smaller airport shops like this one to more standard stores to their “Square” concept, a larger restaurant-like cafe. 2. As an Indian-born company, CCD seems more willing to work within the constraints of Indian real estate. Unlike Starbucks’ high level of location selectivity, CCD appears to believe in quantity over quality. #TeamStarbucks spotted CCDs amongst the low-end trinket shops lining the road to the Taj Mahal as well as in high-end malls in NOIDA. In this image, two CCDs face each other from across the road off Connaught Plaza. Two other CCDs were a short walk away as well. 3. These chairs — Western in design, Indian in color scheme are representative of CCD’s ability to make the foreign seem local. Challenges Coming from hyper-modern Shenzhen, #TeamStarbucks was surprised at the low level of infrastructure in New Delhi. This presents a challenge to multinational corporations — those used to a certain standard of real estate — when they look to expand into Delhi. The constant construction that engulfs Delhi and, more importantly, the lack of uniform and high-end building sites combine to severely limit potential areas for companies aimed at the upper echelons of society. That is certainly true in the case of Starbucks. Even its flagship location on Connaught Place seems less of an ideal than a compromise. The scene immediately outside Starbucks’ door is a telling tableau of the challenges facing businesses in Delhi. 1. Construction is a constant in Delhi. The renovations of Connaught Place pictured here were supposed to have been completed in time for the 2010 Commonwealth Games. They are nowhere near completed. 2. Delhi’s vibrant street life — represented here by the omnipresent snack stands — pose a challenge to businesses who prize uncluttered sidewalks and clear sightlines. 3. Trash is everywhere in Delhi— even fifteen feet from Starbucks’ premier location. Tata Due to India’s byzantine business rules and suspicion of foreign companies, Starbucks partnered with the Tata Group — an leading Indian conglomerate — when entering the Indian market. Difficulty finding a suitable partner is one of the main reasons Starbucks entered the Indian market 13 years after it entered China. 1. The flagship Starbucks in Connaught Place — the former center of colonial power — prominently promotes Starbucks as “A Tata Alliance.” This points to India’s bureaucratic environment and also helps to deflate the notion that Starbucks is a culturally colonizing force. 2. As this India-focused map notes, Starbucks and Tata are working together to bring Indian coffee to the world, thereby flipping the common perception of Starbucks as introducing Western culture to the East. 3. At this smaller airport shop, the “Alliance” tag remains, signalling to locals and natives alike the power of this partnership. Future Facing an established coffee behemoth in Cafe Coffee Day, and limited by the constraints of the Indian real estate market, the way forward looks challenging for Starbucks. That said, the company has plans to open 50 outlets in India by the end of 2013. #TeamStarbucks visited one of those upcoming outlets at the Select Citywalk mall in South Delhi. According to an executive we met with at Jones Lang LaSalle, this mall commands the highest rents in Delhi. It wasn’t hard to see why. 1. Starbucks’ new location occupies a prime spot directly on the mall’s center plaza with frontage inside the mall as well. 2. Select Citywalk offers the best of both worlds: traditional and modern. By combining an enclosed mall (3.) with an arcaded outdoor promenade that wraps around a central square, it uses the traditional language of Delhi’s streets (the arcade) to draw shoppers into a modern shopping center. 4. Citywalk’s sanitized center square approximates and idealized notion of public space for high-end stores: free of trash, visual clutter, and beggars. It is, of course, anything but public: guards patrol the perimeter and shoppers have to pass through metal detectors to enter. Going forward, though, Starbucks will have to make tough choices regarding locations— all of India is not Citywalk. 1 2 3 1 2 3 1 2 3 1 2 3 4
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TeamStarbucks
Glocalization in India
1
#TeamStarbucks was shocked upon entering Starbucks’ flagship store on Connaught Place in New Delhi. The decor was drastically different from the Starbucks’ Chinese location. Gone were the images of African and Latin American coffee farmers. Gone were the kitschy posters of Italy and Rwanda. Gone was any indication that Starbucks was an international company. Instead, this Starbucks projected a hyper-local image; almost all the decor was “Indian” and sought to convey the idea that Starbucks is an Indian company. This drive is rooted in two factors: India’s history of colonialism and Starbucks’ need to compete with Cafe Coffee Day, the more-established coffee chain in India. 1. Located above the milk-and-sugar station — the site of international murals and environmental information in Starbucks’ Chinese outlets — these images of “local craftsmen creating” are central to Starbucks efforts to appear Indian. 2. As the product of these “local craftsman,” this prominently displayed woven rope structure makes physical the “Starbucks is Indian” implication that the previous images only suggested. 3. A melange of vaguely Indian antiques and faux-distressed Starbucks bags, this display attempts to deepen this linkage by situating Starbucks not only in local context but also in a historical context. This area was also the site of many group pictures taken by excited customers who appeared to be visiting Starbucks for the first time. 4. This image of an Indian coffee farmer is a marked change from the African and Latin American farmers seen in Starbucks outlets in China and America. It seems designed to remind Starbucks’ Indian customers that all of the beans used in the company’s Indian outlets are sourced from India. 5. The unfinished walls and painted logo mark a dramatic aesthetic departure from Starbucks’ polished Chinese locations. As with the other aspects of the decor, they provide Starbucks with a history it lacks.
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Cafe Coffee Day
Unlike in China, Starbucks is not the most-prominent chain of coffee shops— not by a longshot. In India, Cafe Coffee Day (or CCD, as the young people of Delhi affectionately call it) opened in 1996 and dictated the rules of coffee shop culture in India. With their Indian color schemes, quirky local advertising, and renowned India-only vertical integration, CCD promotes itself as a distinctively Indian enterprise. Cafe Coffee Day’s success explains why Starbucks’ branding in India is so focused on creating linkages with Indian culture. 1. Cafe Coffee Days come in all shapes and sizes, from smaller airport shops like this one to more standard stores to their “Square” concept, a larger restaurant-like cafe. 2. As an Indian-born company, CCD seems more willing to work within the constraints of Indian real estate. Unlike Starbucks’ high level of location selectivity, CCD appears to believe in quantity over quality. #TeamStarbucks spotted CCDs amongst the low-end trinket shops lining the road to the Taj Mahal as well as in high-end malls in NOIDA. In this image, two CCDs face each other from across the road off Connaught Plaza. Two other CCDs were a short walk away as well. 3. These chairs — Western in design, Indian in color scheme are representative of CCD’s ability to make the foreign seem local.
ChallengesComing from hyper-modern Shenzhen, #TeamStarbucks was surprised at the low level of infrastructure in New Delhi. This presents a challenge to multinational corporations — those used to a certain standard of real estate — when they look to expand into Delhi. The constant construction that engulfs Delhi and, more importantly, the lack of uniform and high-end building sites combine to severely limit potential areas for companies aimed at the upper echelons of society. That is certainly true in the case of Starbucks. Even its flagship location on Connaught Place seems less of an ideal than a compromise. The scene immediately outside Starbucks’ door is a telling tableau of the challenges facing businesses in Delhi. 1. Construction is a constant in Delhi. The renovations of Connaught Place pictured here were supposed to have been completed in time for the 2010 Commonwealth Games. They are nowhere near completed. 2. Delhi’s vibrant street life — represented here by the omnipresent snack stands — pose a challenge to businesses who prize uncluttered sidewalks and clear sightlines. 3. Trash is everywhere in Delhi— even fifteen feet from Starbucks’ premier location.
Tata
Due to India’s byzantine business rules and suspicion of foreign companies, Starbucks partnered with the Tata Group — an leading Indian conglomerate — when entering the Indian market. Difficulty finding a suitable partner is one of the main reasons Starbucks entered the Indian market 13 years after it entered China. 1. The flagship Starbucks in Connaught Place — the former center of colonial power — prominently promotes Starbucks as “A Tata Alliance.” This points to India’s bureaucratic environment and also helps to deflate the notion that Starbucks is a culturally colonizing force. 2. As this India-focused map notes, Starbucks and Tata are working together to bring Indian coffee to the world, thereby flipping the common perception of Starbucks as introducing Western culture to the East. 3. At this smaller airport shop, the “Alliance” tag remains, signalling to locals and natives alike the power of this partnership.
Future
Facing an established coffee behemoth in Cafe Coffee Day, and limited by the constraints of the Indian real estate market, the way forward looks challenging for Starbucks. That said, the company has plans to open 50 outlets in India by the end of 2013. #TeamStarbucks visited one of those upcoming outlets at the Select Citywalk mall in South Delhi. According to an executive we met with at Jones Lang LaSalle, this mall commands the highest rents in Delhi. It wasn’t hard to see why. 1. Starbucks’ new location occupies a prime spot directly on the mall’s center plaza with frontage inside the mall as well. 2. Select Citywalk offers the best of both worlds: traditional and modern. By combining an enclosed mall (3.) with an arcaded outdoor promenade that wraps around a central square, it uses the traditional language of Delhi’s streets (the arcade) to draw shoppers into a modern shopping center. 4. Citywalk’s sanitized center square approximates and idealized notion of public space for high-end stores: free of trash, visual clutter, and beggars. It is, of course, anything but public: guards patrol the perimeter and shoppers have to pass through metal detectors to enter. Going forward, though, Starbucks will have to make tough choices regarding locations— all of India is not Citywalk.
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