Late is good -look at what Starbucks is doing.

by chee Leng (on coffee makers)

Starbucks Cafe

Starbucks Cafe

Starbucks is on the rise, everywhere and everything that they do prospers. Could it be because they are doing is slowly?

While, they are early adopters for all things marketing, i.e. mobile apps marketing, social media marketing etc. They are slow when it comes to entering markets.

They are slow to enter major European cities (in fact they are not even in Italy yet), and only now they are entering India.

India by all counts is full of potential. They have a huge middle class, a youthful generation that worships all things Western.

Companies like Coffee Bean and Tea Leaves, Gloria Jeans, and Coasta Coffee have all started their operations in India. Even Lavazza make entrance into India by acquiring Barista a local coffee chain.

But, Starbucks is only recently preparing to enter India after partnering Tata group.

The question is why?

Isn't India the same as China which Starbucks are rapidly expanding, and termed it their second home market?

With so many companies succeeding in India, isn't there plenty of reason to enter the market?

Here is my $0.02

Isn't India the same as China which they are rapidly expanding?

While, the growth rate might be similar to China, China is more systematic when it comes to growth. Ironic that might sound, the regimental way and top down approach helps the chinese economy.

For one, they do not have to content with the "democracy" issue. Every few years, you might face a change in government, a change in agenda, and that is not good for the country.
The tax might change, the hiring rules might change, such changes could impact companies earnings.

Both India and China suffers from corruption, but the latter handle it better because of the tight control which they are able to exercise.

Thus, while the growth rate on the whole is similar, China would be easier in doing business then India.

With so many companies succeeding in India, isn't there plenty of reason to enter the market?

There have not been major success announced by any companies, although they are making good money operating in India.

The huddles are the political environment which changes frequently and the red tapes that companies have to face when dealing with government officials.

Even with Starbucks coming into India, importing of coffee beans and other products would be issue that they face, taking into consideration the high tax rate of imports.

Starbucks is later probably because it is adopting a "wait and see" attitude, now that its peers are doing okay, the time is right.

More importantly, it is waiting for the right partner, and in India, you probably wouldn't go wrong partnering with a conglomerate such as Tata group.

Starbucks is late in entering into India, but from what I see, the catch up would be fast and soon, they should dominate India, the way they dominate so many other markets.

So, who says it is not good to be late?

What is working for Starbucks now is of course the partnership with Tata group which is huge in India. Tata network would helps in Starbucks expansion.

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