Global Themes

On Globalization & Venture Capital

A tiny Indian multi-national dreams global…

Several months ago, I wrote a post on how some of the best small companies and start-ups were going global from Day One of their operations.

Then, a few weeks ago, I wrote about a small Indian company, funded by Sequoia that, in a bold and ambitious move to go global, had opened a coffee shop in (of all the places) Vienna in the heart of Europe…

coffee-day.gif

Last week, I read Part II of this story: “Cafe Coffee Day, India’s largest coffee cafe chain, has opened its second outlet in Vienna…” The company’s Director, Naresh Malhotra said, “We are planning to open more outlets in and around Vienna and, by establishing ourselves in Austria, we plan to enter the German coffee market.”

Its marketing head said, “…we are on a constant lookout for every potential opportunity“.

I suspect that this is just the beginning.

It is not just large, stolid European and US businesses that will face the brunt of competition from China and India…mom-and-pop coffee shops are vulnerable too.

What is neat is the way that these small companies are managing the challenge of cultural barriers…Café Coffee Day claims “…our differentiating factor is that we have employed for service a young team that has been hired locally.”

The article quoted Arvind Singhal of Technopak Advisors as saying that, “”The very reason why they (Coffee Day) are looking out of the country may be because they have realised that the market has reached saturation here.”

For a moment I thought I was reading the story of how Japanese companies became global leaders in their markets…

November 13th, 2006 Posted by | Global Competition, Globalization, India | 3 comments

3 Comments »

  1. Shantanu, that is interesting. I have not see Cafe Coffee Day in Vienna but based on what I saw in India, if there is a comparison with Cafe Haag for choice, I would stay with Cafe Haag.. As for India being ‘saturated’, I disagree. I don’t think opening 350 stores in 66 cities (CCD website stats) counts for saturation in India. They may have had a strategic reason for choosing international expansion over domestic but saturation is difficult to believe.

    Comment by Shefaly Yogendra | November 14, 2006

  2. Additionally, would you consider putting an ’email this’ link on your posts? It makes it easy to share your posts with others. Thanks.

    Comment by Shefaly Yogendra | November 14, 2006

  3. Shefaly, India is still developing and beyond Tier-I and Tier-II cities, CCD would find it very hard to grow (for reasons of price, taste etc) – in the short term. I think that is what they meant when they said saturated…of course it is also a strategic move.

    Thanks for the suggestion about “email it” link. I will implement it this weekend.

    Comment by Shantanu | November 16, 2006

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