Café Coffee Day, India's largest retail coffee shop chain, plans to open 19 more outlets across Pakistan in the next 12 months after the success of its first venture in Karachi, a top company official said here Sunday.
The company owns all the stores abroad except the ones in Pakistan. In Pakistan our presence is through the franchisee route to protect investments and the Indian law does not allow one to own property there, he said.
“Since there is no presence of Starbucks in Pakistan and with only Costa as competitor, we plan to maximise our investments by opening more stores,” he added.
Café Coffee Day director Naresh Malhotra said, "We are opening the second retail outlet in Karachi next week in the posh Clifton area where we are already operating the first outlet since November 2006. We plan to open 18 more such outlets in the four provinces of Pakistan, covering Islamabad, Lahore, Peshawar and other cities later this year."
Unlike in Vienna where the company already operates two retail outlets on its own, it has opted for a franchise route in Pakistan to comply with the regulatory framework there and protect its investments.
Malhotra said on the sidelines of the second India International Coffee Festival (IICF 2007), "Buoyed by the overwhelming response to our first outlet, we have decided to open the second one in the same locality to create a cluster for greater visibility, brand promotion and increasing market share.We intend to create similar clusters in other Pakistani cities to hard sell our products and maintain our identity."
With an upfront investment of about Rs.5 million in each outlet, the company plans to make a cumulative investment of Rs.90 million in Pakistan and create a retail chain as in India.
As part of its expansion spree in the subcontinent, the subsidiary of the Rs.3.5-billion Amalgamated Bean Coffee Trading Company Ltd (ABCTCL) plans to open about 100-150 outlets spanning 100 cities in fiscal 2007-08 with an upfront investment of Rs.300-450 million.
Malhotra said, "We are setting up our kiosks with vending machines at about 120 railway platforms across the country in the next 12 months to boost consumption of our coffee varieties and brands."
The company is also in talks with two more low-cost air carriers to extend its reach beyond Air Deccan and GoAir in airline catering.
The private firm, which raised Rs.1.25 billion through two rounds of funding from the International Finance Corporation (IFC) of the World Bank and the US-based Sequoia Capital, is projecting about 30 percent annual growth to post about Rs.4.5 billion for the current fiscal.