MUMBAI: Global coffee giants Starbucks and Tim Hortons have a new competitor in India – Asian rival Kopi Kenangan. The Indonesian brand, valued at over $1 billion, plans to capitalise on the growing cafe culture in the country with pricing lower than its competitors and a menu localised to cater to the Indian palate.
“For any retail brand, it would be such a waste if you miss the train in India,” Edward Tirtanata, co-founder and group CEO at Kenangan Brands, told TOI. The company is backed by Peak XV Partners and Meta co-founder Eduardo Saverin’s B Capital.
A huge population, expanding economy, and significant purchasing power in metros like Delhi, Mumbai, and Bengaluru provide enough room for new entrants to have a play in the market despite a growing mix of global and local coffee chains in the country, said Tirtanata. For India, where the cafe market is still nascent compared to other Asian countries, the brand has priced its menu cheaper than the rate at which it sells in other markets like Singapore and Australia, Tirtanata said.
Besides global brands like Starbucks, Tim Hortons and Pret A Manger, a new crop of home-grown brands like Third Wave Coffee and Blue Tokai Coffee Roasters are expanding in the local market alongside traditional chains Barista and Cafe Coffee Day.
C CD, which ushered in the cafe culture in the country in the 90s, lost ground to rivals weighed down by huge debt and financial troubles. The company has been reducing its store count.
In India, where socialising over a cup of coffee or tea is a popular culture, QSR brands McDonald’s and KFC are also competing for a share of the coffee space through their offerings.
Kopi Kenangan’s pricing in the market, which is largely led by students, young Gen Z, and millennials, many of whom are also in their first jobs and may look for cheaper options, starts at Rs 99 for an Espresso shot and under Rs 150 for bigger servings, lower by about Rs 80-100 than what Starbucks and local chains like Blue Tokai offer. “Our price points are far more accessible than other international chains. We are positioned well within a gap that exists in the Indian market,” said Tirtanata.
Its strategy to source most ingredients locally has partly helped the company to keep its pricing low. Sluggish consumer demand amid high inflation over the past few quarters weighed on brands like Starbucks, which slowed store expansion. Kopi Kenangan, which launched in Delhi earlier this month, plans to enter Mumbai and Bengaluru in the next couple of years.