Starbucks Still Eyeing India

So what if Starbucks (Nasdaq: SBUX  ) isn't the mighty coffee colossus it once was? If its announcement last week is any indication, the java purveyor's as determined as ever to expand into India within two years.

Despite last week's grounds for exuberance, Starbucks still reported flagging sales and customer traffic in its latest quarterly earnings. The United States may be all coffee-d out for now, but investors must be heartened by Starbucks' unaltered plans to start selling coffee to one of the world's most populous emerging economies. After all, many investors love Yum! Brands (NYSE: YUM  ) for that company's exposure to China, the only nation on earth whose population tops India's.

For large companies, entering a new global market can be as risky as it is rewarding. Wal-Mart (NYSE: WMT  ) recently seemed to enjoy a warm welcome in India. But a foray into politically dicey Russia led to Ikea's big mistake, and Google (Nasdaq: GOOG  ) recently endured some Chinese outages after the local government said it was spreading inappropriate content. Starbucks seems to be proceeding with caution in its own entrance to India; it laid the groundwork several years ago with an odd, interesting back-door approach, introducing potential patrons to its coffee through Indian movie theaters.

Starbucks' plans for India aren't a guaranteed overnight success. However, the coffee chain's shareholders can at least feel relieved that its recent, less caffeinated growth hasn't scuttled one of its major growth plans.

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Starbucks and Wal-Mart Stores are Motley Fool Inside Value selections, and Starbucks is also a Motley Fool Stock Advisor selection. Google is a Motley Fool Rule Breakers recommendation. The Fool owns shares of Starbucks. Try any of our Foolish newsletter services free for 30 days.

Alyce Lomax owns shares of Starbucks. The Fool has a disclosure policy.


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