Starbucks resets strategy in India as local competition heats up
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Starbucks (NASDAQ:SBUX) continues to shift its strategy in India with competition increasing from local startup cafes and growing chains such as Third Wave and Blue Tokai.
Part of strategy reset from the Seattle-based coffee giant is to offer smaller, cheaper beverages that may be more attractive in the less populous towns the chain is expanding to in India. The chain is offering a six-ounce drink priced at $2.24 and milkshakes for $3.33 as part of the pricing change. "As you grow in size, you need to get new consumers," noted Sushant Dash, Starbucks' top exec in India. Dash said the pricing play from SBUX is aimed at shattering the perception that Starbucks (SBUX) is expensive. Starbucks (SBUX) has also launched "Indian-inspired" tea offerings laced with spices and cardamom, both priced at around $2.24. Those drinks are also aimed at breaking through the perception that the chain only offers expensive, large-sized coffee drinks.
Euromonitor estimates that India's fast-growing specialty tea and coffee cafe market is worth $300M and poised to grow 12% each year. The market is considered largely untapped with just 11% of Indian homes drinking coffee, as opposed to the 91% of households drinking tea. 
Starbucks (SBUX) operates in India as part of a joint venture with Tata Group. At the end of 2022, Starbucks (SBUX) was the 5th largest chain in India as ranked by number of outlets.
Shares of Starbucks rose 0.18% in premarket action on Wednesday to $98.40 vs. the 52-week trading range of $70.35 to $115.48.
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