Indian coffee chain Cafe Coffee Day plans to expand beyond bricks-and-mortar stores by entering the e-commerce business.
Cafe Coffee Day is gambling that a number of the 300 million Indians expected to be online by 2014 will want to order coffee supplies over the internet – so it is ramping up its e-commerce in collaboration with logistics companies including Blue Dart, Fedex and others.
“We get orders from places like Manoli, which is 150 km from Chandigarh, but have no means to supply there. Courier companies don’t cater to every destination. So, our team is tracking orders received on the website and we will strengthen our supply chain accordingly,” said S Vejay Anand, president of Amalgamated Bean Coffee Trading Company, which owns Cafe Coffee Day.
Customers living in tier-IV towns and rural and hilly areas who have no access to coffee shops will benefit most from the initiative.
Meanwhile, in an effort to counteract the much awaited entry of Seattle-based coffee chain Starbucks in the country through its local franchisee Tata Global Beverages, Cafe Coffee Day plans to open 1000 new cafes by 2015. Currently, it has 1275 cafes across India.
“India has 5700 cities and towns, which can house a cafe. However, to date only 185 of them have one. There are vast opportunities to grow the cafe business in the next few years and the entry of Starbucks will only expand the market,” said Ramakrishnan K, president, marketing, Cafe Coffee Day.
Cafe Coffee Day has started introducing new range of packaged products such as snacks, flavoured juices and savouries and merchandise items like tumblers, mugs and personalised products.
“We not only offer a product but a complete brand experience to the consumer,” said Anand.
Retail analysts consider Starbucks’ entry to India will have little impact on local coffee chains like Cafe Coffee Day as it will cater to higher-end customers while most of the local chains target the mass market.
“Starbucks will not dilute its premium positioning for the Indian market,” said Purnendu Kumar, VP, retail, Technopak Advisors.