Chain Reaction

On a muggy afternoon in October 1996, various cousins, aunts and I set out for Bandra. McDonald’s had opened on Linking Road and we wanted to participate in the thrilling initial hedonism of indulging in foreign brands. There were few then as India was just five years into Liberalisation. But none of the brands represented the temptation of the West as beckoningly as McDonald’s. Full of anticipation, we stood in queue for what seemed like hours but when I finally bit into a Maharaja Mac, I was profoundly disappointed. America tasted like it had been cultivated in a petri dish.

When Starbucks opened in Horniman Circle on Saturday, October 20, it felt like 1996 all over again. The media went embarrassingly wild at the press conference the previous day, live Tweeting the event and generally treating the opening of the store as if it was the second coming. There were long queues of patrons waiting to enter on the first day. When I visited on the fourth day—it was a muggy October afternoon like the one in 1996—I waited in line on the pavement outside Starbucks for close to an hour to enter the 4,000 square-feet store filled with teenagers swilling enormous Frappuccinos sweet enough to shatter teeth. The decor was full of Indian exotica like trunks and filigreed woodwork. Was this a coffee shop or a palace in Rajasthan? (Here’s a tip: to skip the queues, visit the Starbucks at the Taj, which is perhaps the only five-star hotel in the world to have an outlet. The coffee is priced the same as in other stores.)

It’s baffling that Starbucks got the reception it did in 2012, at a time when foreign brands are not the novelty they were 20 years ago. More people can afford to holiday in foreign countries where Starbucks outlets are as ubiquitous as Café Coffee Days are in Indian cities. With a few exceptions like Zara, which was mobbed by shoppers when it opened, the arrival of international chains doesn’t prompt this sort of reaction from people or the press. So why Starbucks?

It’s hard to say judging by the demographic of the queue. A majority of those waiting were college kids who must have finished class by early afternoon. That’s understandable—teenagers like hanging out in coffee shops and it’s likely many of them haven’t travelled widely enough to be sufficiently blasé about Starbucks. But the queue also had several suits and elegantly togged women that the tabloids would describe as “Sobo ladies” who have no doubt sampled Starbucks across the world. Anish Mashruwala, a lawyer at J. Sagar Associates, a law firm with an office nearby, said that he had been to several Starbucks cafes abroad and was there “because there’s no other Starbucks in Bombay” and “because of the novelty” of it. Didn’t he think he was being over enthusiastic by waiting endlessly in the sun just for a coffee? “This is madness,” he agreed. Rajat Soni, a realtor who works in Fort, was taking a chance for the second time. He had come the previous day but left because the queue was too long. “All are coming,” he said. “I thought let’s see what’s new. But I’ve heard Costa is better.”

Perhaps the novelty then is experiencing Starbucks on home ground. To be sure, even after two decades of Liberalisation, foreign brands have taken their time in entering the Indian market. That’s because the government, by imposing policies that safeguard local industry, hasn’t made it as easy as foreign companies would like. The state allowed 100 per cent foreign direct investment in single brand retail only this year. That too only if companies acquire 30 per cent of the materials they require from homegrown suppliers. Previously foreign entities were allowed to enter the market via joint ventures with Indian companies in which they could have a maximum stake of 51 per cent. Starbucks has been trying to enter India for the past five years. It has a 50-50 partnership with Tata Global Beverages and its Indian outlets will be supplied with Tata Coffee. The company had initially planned to open 50 outlets in the country by the end of the year. It has since scaled down its ambitions.

Caught up in the excitement of Starbucks’s arrival, the press has reported it with typical myopia. Issues that could be of concern have been overlooked. For instance, earlier this month, Starbucks was embroiled in two controversies. The company, which is usually regarded as a friendly employer, was fined in Chile where employees claimed it had illegally replaced striking workers and threatened to cut benefits. British patrons, who have to cope with a struggling local economy, threatened to boycott Starbucks when it emerged that the company hasn’t paid tax in three years. Then there’s the issue of competition. Starbucks has in the past been sued for using predatory tactics to get rid of competition. India’s largest coffee chain, Café Coffee Day, says that it isn’t worried, but it remains to be seen whether small, independent coffee shops have reason to be.

One thing’s for sure. Those more interested in coffee than the coffee shop “experience” won’t be passing up the sweet, strong South Indian brew at Madras Café or the espresso at Kala Ghoda Café for Starbucks any time soon.