Coffee Day enters Joint Venture with Japanese retailer
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Indian cafe chain Coffee Day has partnered with Japanese sales-floor support-service business Impact HD to grow its retail network in India.
The joint venture plans to rapidly build market share in the region’s neighborhood retailing sector, launching a minimum of 450 Coffee Day Essentials branded stores in quick succession.
Coffee Day Group holds a 51 percent controlling share in the joint venture.
“With about three times the population of Japan in the same standard of living as the Japanese, the multi-retail market environment in which food and daily necessities are purchased on a daily basis remains unexplored,” read a statement released by Impact HD. “In India, kirana stores account for 98 percent of the total, and the remaining 2 percent are hypermarkets and supermarkets that incorporate foreign capital and know-how.”
The joint venture will convert lagging Cafe Coffee Day cafes into Coffee Day Essentials neighborhood convenience stores.
The Impact HD JV was among the last major decisions made by Coffee Day Group founder and chairman VG Siddhartha before he took his own life in July.
Questions & Answers
Q.What is the primary goal of the joint venture between Coffee Day and Impact HD?
What is the primary goal of the joint venture between Coffee Day and Impact HD?
The joint venture aims to rapidly increase market share in India's neighbourhood retailing sector. They plan to launch at least 450 Coffee Day Essentials branded stores in quick succession to achieve this goal.
Q.What role will Coffee Day's existing cafes play in this new venture?
What role will Coffee Day's existing cafes play in this new venture?
The joint venture intends to convert existing, underperforming Cafe Coffee Day cafes into the new Coffee Day Essentials neighbourhood convenience stores. This repurposes current assets for the new strategy.
Q.What market gap does Impact HD believe the joint venture will address in India?
What market gap does Impact HD believe the joint venture will address in India?
Impact HD sees an unexplored multi-retail market for food and daily necessities in India. They note that kirana stores dominate, with hypermarkets and supermarkets making up only a small percentage of the total.
Q.Who holds the controlling interest in the new joint venture?
Who holds the controlling interest in the new joint venture?
Coffee Day Group holds the majority stake in the joint venture. They have a 51 percent controlling share, giving them significant influence over the venture's direction and operations.
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