India’s new guests: Apple, Amazon and Starbucks
By Sriram Vadlamani Jan 24, 2012 11:16AM UTCIf all goes well, Indian skylines will soon be glittering with three glorious brand names: Amazon, Apple and Starbucks. All three brands are different in their own right but do have some things in common.
Amazon and Apple are the technology brands. Apple and Starbucks will be entering through the single brand route and Amazon through the multi-brand route. Amazon and Starbucks will be facing stiff competition and probably change the course of the industry, but Apple will chart its own course.
Let’s look at what these three companies can expect from India and, most importantly ,what India can expect from these companies.
Amazon
Still limited by the 51% FDI cap in multi-brand retail, Amazon has long been rumored to be setting up shop in India. It has been ramping up staff and as per the latest news it’s setting up a fulfillment center, which is a euphemism for a big warehouse. What does this mean for eCommerce in India? It might change one more time.
Flipkart has been the de facto standard of eCommerce in India. From the humble beginnings of selling just books, Flipkart has transformed into a eCommerce powerhouse selling anything from fountain pens to expensive Samsung Galaxy S2 phones. Flipkart added a new category almost every couple of months in 2011. Many have opined that this is to counter Amazon’s impending entry, and quite rightly so.
Amazon will face some intense competition from Flipkart, and vice versa. Over a period of time, what Flipkart can offer, Amazon can offer too. But can Flipkart offer what Amazon can offer? I’m talking about eBooks and the Kindle.
Amazon has a potent weapon in its massive digital book collection, which is closing in on the 1 million mark. If Amazon offers books at Indian prices, then it might just have the whole industry to itself. Amazon’s Kindle Books sell for $9.99. This is much higher than many paperback editions which are sold in India. It is a pricing strategy Amazon must re-think if it wants to make a dent in the eCommerce market of India.
Starbucks
People who walk into Starbucks will not be going there for the coffee, let’s be clear on that. It’s a place to meet and Starbucks is a much-needed brand which can provide the right ambiance.

Starbucks. Pic: AP.
Starbucks will be competing with Cafe Coffee Day (CCD) and Lavazza’s Barista coffee chains. In all likelihood Starbucks will be serving the same clientele and probably will have the same prices too and might have free WiFi.
Starbucks will gain traction for sure, as the population is always on the look out for a new place to hang out. After a while, would it be any different from any other coffee place? Read my earlier thoughts here.
Apple
Apple has a strange aura around it. In India, like everywhere else, it has a cult status. People love it. People hate it. Those who want Apple products already know how to get them. Those who don’t want Apple products will not buy them even if a Apple store is opened in front of their house.
I don’t expect any fireworks from Apple, except for a big store with great ambiance. The sales will not improve significantly and there will not be any China-esque egg-pelting incidents. Just like Apple is warming up to India, maybe, India will start to warm up for Apple. That is of course when India is done with the Android honeymoon.
An Apple store in any Indian city would be one additional thing to tick off on a city tour.



