9 months ago
Starbucks Shifts to Lower-Cost Model in India
Starbucks, which operates in India through a joint venture with Tata, is changing its strategy.
Instead of focusing on premium prices, it is now trying to attract more customers by offering lower prices.
This is because many people in India want good quality products but at affordable prices.
Starbucks has many stores in India, but it is not making a profit.
To fix this, it plans to make its stores and products simpler and more affordable.
Other companies like Skechers, Domino's, and Decathlon have also made similar changes to succeed in the Indian market.
This shift is important because more people in India are becoming part of the middle class and want to buy products that are good value for money.
Starbucks is shifting to a lower-cost operating model in India to attract price-sensitive consumers.
The company's revenue in FY25 was ₹1,277 crore, but losses widened to ₹135.7 crore.
Starbucks has over 500 stores in 81 cities across India.
Other brands like Skechers, Domino's, and Decathlon have also adapted their strategies to cater to the Indian market.
The shift is driven by the growing middle class in India, which is projected to reach 38% of the population by 2031.
- Who
- Starbucks (Tata Starbucks JV)
- What
- Shifting to a lower-cost operating model in India
- Where
- India
- When
- FY25 (Fiscal Year 2025)
- Why
- To address price-sensitive consumers, high rentals, and uneven demand trends
Key facts
- Company
- Starbucks (Tata Starbucks JV)
- Revenue (FY25)
- ₹1,277 crore
- Loss (FY25)
- ₹135.7 crore
- Stores in India
- 500+
- Cities with Presence
- 81
- Indian Partner
- Tata Consumer Products
- Strategy Shift
- Lower-cost operating model
- Target Market
- Price-sensitive, aspirational consumers
Quotes
Ankur Bisen
Senior partner and head of retail, consumer products and food at The Knowledge Company (formerly Technopak Advisors)
“Brands like Starbucks have largely saturated the top end, with a presence across 81 cities and about 500 stores. The question now is: what next?”
financialexpress.com
“As you move down the pyramid, you encounter aspirational but value-conscious consumers. That requires a low-cost model—more accessible price points, simpler menus and functional store formats.”
financialexpress.com
Ghulam Zia
Executive director at Knight Frank India
“A low-cost model can also help brands like Tata Starbucks offset high rentals in prime locations, cut losses and scale faster across markets.”
financialexpress.com
