Anand, DNA (Daily News & Analysis)
March 13, 2013
this: the organised (or upmarket) Indian cafe market is estimated
to have notched up sales of $230 million (Rs1,246 crore) in 2012.
And the figure is expected to bubble up to $410 million (Rs2,222
crore) by 2017, as per Technopak estimates.
No wonder, 5-7 more foreign players are keen to give the likes
of Starbucks, Coffee Bean and Costa a run for their rupee income.
The identity of cafe kings eyeing India remains tightly guarded,
but it is believed they are from Europe, South-east Asia, the
UK and Australia.
Sunil Chaudhary, assistant vice-president of Tecnova, a retail
consultancy that has been approached by a few foreign players,
attributes the growing interest in India to a combination
of the Starbucks effect and the expectation that the market will
double in five years. They are all on the lookout for Indian
partners, a task that is proving tough, according to retail consultancy
Devangshu Dutta, CEO of Third Eyesight, a consulting and advisory
firm, says that in the past one decade, the cafe has emerged as
both a preferred hangout point and an informal meeting place in
This, he says, provides headroom for growth. The growing
propensity to spend and the growing eating-out habit in urban
India is another attraction for foreign chains. Besides tea and
coffee, other experimental drinks such as bubble tea,
a south Asian specialty, will be offered at cafes.
Foreign chains interest extends beyond the cafe segment
to the wider quick service restaurant (QSR) market, says Arvind
Singhal, chairman of Technopak Advisors. Thats understandable
because the food market is still underdeveloped, compared to other
countries. Niches like Chinese food, bread and sandwich are particularly
Most players are keen on entering the Indian QSR segment via
the franchisee route. QSRs account for 18% of the $74 billion
(Rs4 lakh crore) informal eat-out sector in India, including restaurants
that serve traditional Indian snacks like idli, dosa and chaat,
as per Euromonitor estimates.