Starbucks Corporation (SBUX.US) increases its investment in the Indian market: Plans to open one hundred new stores every year, CEO says "Expansion is a priority over profitability"

Although global businesses are facing adjustment pressures, Starbucks Corporation (SBUX.US) is accelerating in the Indian market. This coffee giant, in a joint venture with Tata Group, Tata Starbucks Corporation (Tata Starbucks Pvt.), plans to add 50 to 100 new stores in India each year, fully seizing the growth opportunity in the coffee market of the country with the largest population in the world. Sushant Dash, CEO of Tata Starbucks Corporation, said in an interview that India is "one of the fastest-growing markets for Starbucks Corporation globally". In the past four to five years, the number of Starbucks Corporation stores in India has doubled to over 500, maintaining a market share of about 30%. This expansion momentum is far from over. N Chandrasekaran, Chairman of Tata Consumer Products under Tata Group, revealed at a recent shareholder meeting that Tata Starbucks Corporation is expected to achieve positive EBITDA (earnings before interest, taxes, depreciation, and amortization) in the 2026 fiscal year. The joint venture partners believe that the Indian market can ultimately support around 8000 Starbucks Corporation stores. Investing in losses and adapting to competition through localization Although Tata Starbucks Corporation is currently operating at a loss, Dash made it clear that the company will not "sacrifice growth for profitability". Dash pointed out that only about 24% of the population in India currently consumes coffee, while the population that consumes tea is as high as 93%, indicating a huge growth potential. With rising income levels and changing consumption habits, coffee consumption in India continues to rise, leading to increasing competition from local chains like abCoffee, Blue Tokai, as well as many international brands. To respond to this competition, Tata Starbucks Corporation has adopted a multi-format layout strategy, including drive-thru outlets, highway stores, pop-up stores, and experiential stores, and has opened four boutique Reserve stores in Mumbai, Delhi, and Kolkata. Additionally, most products of Tata Starbucks Corporation are sourced locally, including concentrated coffee beans grown and roasted in India, effectively mitigating risks of global supply chain disruptions. Expansion against the trend of global contraction The significant expansion of Starbucks Corporation in India contrasts sharply with its contraction in other global markets. Currently, Starbucks Corporation is streamlining its operations in the United States, while addressing consumer backlash in South Korea and Middle Eastern markets. Last year, the company also sold 60% of its equity in Chinese operations. After successfully reducing its presence in China, Starbucks Corporation seems to be turning its attention to the Japanese market. It has been reported that Starbucks Corporation is considering a major strategic adjustment in its Japanese operations, with potential options including selling part of its equity or pushing for a relisting through an IPO in Japan. The company has already begun preliminary discussions with investment banks regarding this matter.