Growth Of Fast Food Chains In India

Posted on December 3, 2010 in Business and Economy

By Rohit Singh:

KFC, Pizza Hut and Domino’s are just three examples of the many fast food chains operating in India. In the past few years, the food sector has taken a huge leap as far as the growth of the food sector is concerned and especially in the fast food segment. Every corner of the street today has stalls or shops, small or big, operating and growing.

As far as the huge food chains are concerned, they basically operate in malls in big cities or metropolitan cities whereas in smaller cities like Lucknow, Jaipur, etc. they not only operate in malls but they have actually opened up as dine in restaurants. “It wouldn’t make sense if we positioned ourselves merely as a convenience, delivery brand,” explains Ajay Kaul, MD, Domino’s India. Taking a cue from McDonald’s runaway success of Rs 20 burgers and Rs 7 ice-cream cones, Pizza Hut too introduced a heavily Indianized menu with prices starting as low as Rs 75.

Home delivery is another system which has started spreading branches in India with the facility being made available at the speed of order delivery in half an hour. Nearly 65% of Domino’s revenues come from home deliveries and the segments dominance is expected to continue. “As our urban life continues to get busier, home deliveries will become more popular. But in smaller markets dine-in will drive growth,” adds Ajay Kaul. All the major MNC fast food chains such as McDonald’s, Yum! (which owns the KFC and Pizza Hut brands), and Domino’s are fast changing their stripes and business models in India.

Such chains are targeting not only the non-vegetarians but also the vegetarians; earlier there was nothing to allure them at places like KFC. But things changed accordingly.

“We found that the vegetarians in such groups were always finicky and as a result had the veto power to decide where they should eat. We want KFC to appeal to everybody. Vegetarians and non-vegetarians,” says Arvind Mediratta, chief marketing officer, Yum Brands India. Although KFC still gets just about 15% of its revenues selling vegetarian items, it has significantly increased the number of veg offerings on its menu.

Thus, the tremendous growth of such sectors do make one wonder whether there will be a point when pizzas and burgers take over the rest of the Indian cuisines (including quick snacks) or is it just that we are too busy to ape our western counterparts and satisfy ourselves with the feeling that even we have an international taste that makes us at par with the rest of the crowd. There is actually nothing wrong with having “International taste” but as wise people always say “One should never forget one’s roots and should always go for a reality check time and again”.