NEW DELHI--Dunkin' Donuts officially launched in India on Tuesday in a bid to tap the country's growing café culture, a move that is set to pave the way for competition in the Indian market with Starbucks Corp.
The Indian unit of the U.S. food retail chain, a joint venture between Dunkin' Brands Group Inc and India's Jubilant FoodWorks Ltd., opened a flagship store in the heart of New Delhi, at Connaught Place.
This is one of 10 stores the company plans to open in India by March 31, 2013, all of which will be in New Delhi. Dunkin' says it will consider opening stores elsewhere in the country – starting in Mumbai, India's financial capital – from the following year. Overall, Dunkin' plans to open between 80 to 100 outlets in the country over the next five years, most of which will be housed in high street areas or malls.
Launching the India operations has cost about $1.8 million and there are plans to invest around $2.3 million more on stores and manufacturing facilities this year, said Ajay Kaul, chief executive officer of Jubilant FoodWorks.
Mr. Kaul said that while the company is not planning to open stores through franchise agreements in the near future, it is open to this possibility further down the line.
Branding itself as "Dunkin' Donuts & More" in India, the company's strategy has focused on diversifying its food menu beyond doughnuts by introducing a wide range of eating options that include ciabatta sandwiches and savory croissants.
There isn't much of a doughnut-eating culture in India, so part of the company's strategy will be to make them more popular. "Doughnuts are still a niche product, but so was pizza a few years back," said Dev Amritesh, president of Dunkin's India unit, speaking on the sidelines of the launch.
To cater to the Indian palate, Dunkin's India menu includes mango doughnuts, Alfonso mango smoothies and spicy sandwich options.
A big focus for Dunkin' is coffee, which has become increasingly popular in India, traditionally a tea-loving country. India's café market, estimated to grow to $680 million in annual sales by the end of March 2016 from last year's $190 million, has drawn international coffee retailers to India.
Among them is Starburcks. In partnership with Tata Global Beverages Ltd., Starbucks plans to open the doors to its first and much-awaited India store in August.
Dunkin's India launch is part of the company's broader strategy to expand in the Asia-Pacific region. The company, which is present in 52 countries, in March announced plans to open over 300 shops in Asia over the next few years.
In India, Dunkin' is pricing its doughnuts at 45 rupees and coffee at 70 rupees – a price range most in India will find expensive.
Besides the Connaught Place branch, another Dunkin' outlet had a soft launch elsewhere in the Indian capital a few days ago.
Jubilant FoodWorks was responsible for bringing Domino's pizza to India 17 years ago through a joint venture. In India, Dunkin' will be sharing Domino's supply chain.
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Source: By Margherita Stancati, WSJ, May 8 2012.
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