Starbucks in talks with ADAG for India foray

Starbucks in talks with ADAG for India foray

Author | Source: The Economic Times | Friday, Aug 18,2006 8:45 AM

Starbucks in talks with ADAG for India foray

Close on the heels of Mukesh Ambani's ambitious retail foray, younger brother Anil is now learnt to be in talks with US coffee retail chain major Starbucks to forge an alliance for the latter's India foray.

Industry sources confirmed that the two companies are already in advanced stages of discussion on the prospective retail formats and other modalities.

This assumes importance as the $6.4bn Starbucks, the leading US coffee retailer, recently announced plans to open its first outlet in India in '07.

Earlier this month, Starbucks chairman Howard Schultz said, at the company's Q3 result conference, "We are equally excited about two other major markets we intend to enter during '07 - India and Russia... We are in discussions with potential joint venture partners in each of these markets. Meanwhile, we are scouting locations, meeting with government officials - all toward gaining additional market knowledge and building critical relationships to make our market entries a success."

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

An e-mail sent to the Anil Dhirubhai Ambani Group (ADAG) failed to evoke a response. An e-mail query sent to Starbucks received no answers either.

Retail seems to be the area where the two Ambani brothers are beginning to tread on each other's toes. Apart from the plans on the food and beverage retail front, Reliance ADAG is also learnt to be planning a pharma retail foray. The company has started talks with the All India Organisation of Chemists and Druggists for this. Former Medicine Shoppe executive director Rajendra Gupta is learnt to be heading the healthcare retail venture for the group.

Starbucks, which has about 3,000 coffee houses in 37 countries, has a three-pronged expansion strategy for markets outside the US - joint ventures, licenses, and company-owned operations. It was reported to be in talks with real estate developer K Raheja group for its India foray last year.

The Reliance ADAG is not new to retail either, operating a chain coffee gourmet shops called Java Green situated inside its Reliance Shops, formerly Webworlds.

With Starbucks' entry next year, India will add another cup to its brewing coffee retail mart, which has seen the entry of Costa from UK and Barnie's from the US recently.

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