MUMBAI – Australian coffee company Di Bella Coffee plans a major foray into the Indian market and looks upon Starbucks as its main competitor in the premium coffee retail segment.
“We are stepping up our India operations. We will open nine more outlets in Mumbai by year end,” the company’s Founder & Managing Director Phillip Di Bella stated in an interview.
The company will invest a total of USD 2.5 million in its expansion, he added.
After Mumbai, the $40-million retail chain is tapping into new markets like Delhi and Bengaluru with a total store count at 20 by the year-end.
After entering the country in 2011, Di Bella had a tumultuous ride changing its local partner and shutting down outlets in cities like Hyderabad.
“India is our third largest market and we are optimistic about the retail business despite challenges like regulation and different State taxes.
“We are profitable here since we have a revenue share model with no minimum guarantee with our landlords and do not have to pay rent like Starbucks does for most of its outlets,’’ said Di Bella.
With international coffee retail chains like UK’s Costa Coffee and Barista still struggling in India, Di Bella claims its biggest competitors are CCD (Cafe Coffee Day) and Starbucks at the mass and premium end of the coffee retail segment.
“We did make mistakes in India by choosing the wrong partners in the past.
“But now, we have the right product, partner and real estate deals. There is an uptake in the coffee retail business here,’’ added Di Bella.
Being a premium brand with pricing almost similar to Starbucks, Di Bella Coffee also competes with the American coffee company in its home market in Australia.
“In Australia, Starbucks did not pioneer coffee retail and has shut down more than 100 stores since it entered in 2000.
Today, it is certainly not the market leader but independent coffee chains which dominate Australia’s coffee retail market,’’ observed Di Bella.