Starbucks in Colombo

The premises being refurbished

Starbucks branding just coming up

Starbucks has finally turned its beady eye to Colombo it seems. There is an outlet coming up at Jawatte road just near the Thimba junction. While Starbucks might just be testing the waters*, the overpriced coffee market indeed seems to be booming.

Its funny, the thing about overpriced coffee is well, its overpriced. But the advent of an affluent upper middle class and the lack of any other alternative time killing joints, im presuming, is contributing to a growing market for high priced kopi. In the West where the concept first developed in busy cities where coffee is considered a necessity, its different. The dynamics are driven by an actual desperation for caffein and near price blind consumers.

Prices are unusually high given our income levels. Coffee in most upmarket shops here cost the same as they do in Singapore or the US. In other words, what is a slightly overpriced mass market operation elsewhere is definitely a luxury brand here.

As Tim Harford says in The Undercover Economist and this link clearly explains, overpriced coffee is usually a result of a coffee shop picking a strategic location near a subway station for example. The high rent drives away competition, and coffee starved customers pay extra for the convenience of a cup of latte enroute to work.

Expensive coffee shops in Sri Lanka and other parts of the developing world however, justify high prices by virtue of prestige. The prices keep the rabble out. So housewives can chill and gossip at the top of their voices, expats can come in to escape from the heat, office workers can take the occasional break and MBA students can discuss course assignments. You pay for the exclusivity and privilege of class, not the coffee. I’m not hating, just analyzing.

But how nice would it be if we started having some Arab style coffee joints here. Like the ones in My Name is Red. More pedestrian, more flavor and still novel enough to collect some street cred and more importantly, cheap. The stuff of dreams.

Funny thing, just up the street from the new Starbucks is a little kadey called ‘Eat cabin’ that’ll serve up some nice hot hot Harischandra for a fraction of the price, there’s even a little bench outside to sit and put a chat.

U PDATE: The outlet is not likely to be a full-fledged Starbucks and likely a new place selling Starbucks coffee. I don’t think this will affect the prices.