Google News
spot_img
spot_img

Where the streets have no name

Must Read

The F&B service industry is one of India’s most vibrant industries with over 25% yearly growth. The Indian food and beverage market, estimated to be over Rs 2 lakh crore in size, may nearly double to touch Rs 3.80 lakh crore by 2017, according to a FICCI-Grant Thornton report.
Amongst the various segments, casual dining and quick service restaurants constitute more than 77 per cent of the overall market.
However, despite immeasurable market potential, cost and legislative snarls have impeded the development of street- or local cuisine-inspired indigenous QSR chains in India. The branded QSR category is dominated by foreign-origin chains, including McDonald’s, Domino’s, KFC , Pizza Hut, among other newer Indian franchisees of global QSR brands. So far, inspite of a slew of regional foodservice outlets who are fairly successful in targeting local tastes and preferences, India has not able to create a national homegrown chain.
"I feel India never had the vision to build a pan-India home grown QSR brand. The regional players are fairly successful, but are fearful to venture out to the rest of India, primarily because of localised tastes and preferences," notes Jagjit Singh, CEO of Kebab Xpress.
Rahul Deans, CEO, Cocoberry, India’s first frozen yogurt restaurant chain, asserts that Indians typically find it more prestigious to be associated with a foreign brand that to create an Indian brand.
["Becoming a pan-India brand is a capital-intensive endeavour. In addition, the large number of licenses required and the lead time to obtain them adds to the woes." 
— Sagar Daryani, CEO, WOW! Momos]

"I feel that Indians find it more prestigious to be associated with a foreign brand. It could also be that franchisees of foreign brands did not want to make the effort to develop their own processes, or create something distinctive and relevant to the Indian consumer, when there was an existing model that could be `cut-pasted’ to India," Deans observes.
Challenges at home
So is there any likelihood of an indigenous chain developing into a national or global fooservice icon? Industry experts believe that opportunities exist, but so do critical challenges.
"QSRs typically face problems of high rentals (the highest in the world relative to sales), due to poor urban planning, a lack of the right manpower and over-regulation — particularly compared to the unorganised sector," says Deans.
Launched in 2009, Cocoberry has an additional challenge of changing consumer perception and to make the old-fashioned dahi cool and hip. "In the frozen yogurt category, an additional challenge is educating the customer about the benefits of the product," Deans adds.
For the six-year-old Kolkata-based chain WOW! Momos, the biggest challenge is of the transformation from a micro to a macro brand. Starting with one kiosk in 2008, the brand has able to expand to 48 stores in five cities, albeit all in east India.
"Becoming a pan-India brand is a capital-intensive endeavour. In addition, the large number of licenses required and the lead time to obtain them adds to the woes," explains Sagar Daryani, CEO of WOW! Momos, who plans to open 60-80 outlets across India in two years’ time.
In addition to the conventional challenges of real estate, legal frameworks and manpower, these brands are now facing the complexity of dealing with consumers who are more connected than ever, more savvy and better equipped.
"The consumer fabric is evolving; today’s consumers are demanding tastier food with additional benefits such as convenience, health, service delivery efficiency. The cost economics are challenging," notes Singh of Kebab Express.
"The challenges have more to do with consumer engagement strategies, ensuring that the consistency and standardisation of the product are maintained, along with trained manpower availability, viable real estate pricing. compliance with the legal framework, offering localised menus," he adds.
"I feel the biggest challenge for my business today is the lack of robust technology. The reason why the international QSR chains are running successfully is that they bring a lot of technological experience, which India lacks," says Srinivasan Kamath, Director of Natural Ice Cream.
Echoing this view, Venkatesh Iyer, CEO & CMD of Mumbai-based Goli Vada Pav says, "Technology is definitely one of the biggest challenges that ultimately hinder scalability."
Iyer claims that Goli has managed to overcome this challenge, and has pioneered with cutting-edge back-end solutions.
"Our products are prepared in a fully automated HACCP-certified  plant near Mumbai. These are then delivered to all the outlets where they just need to be fried before serving. This technology ensures zero wastages and pilferages, uniform and standard taste across all the outlets at all times," he explains.
Goli Vada Pav has more than 320 stores in 88 cities across 19 states. The company plans to open 1,000 stores across the country in the next five years. The company’s fiscal 2015 turnover was in the range of Rs 50 crore, and is expected to grow at 30% Y-o-Y.
With a 1,000-outlets target, the company believes that the turnover will hit Rs 150 crore in the next 3-5 years.
Giving a technological kick
India’s ever increasing mobile internet users clearly indicate that foodservice chains not only need to serve exceptional dining experiences, but also have to transform to technologically powered brands.
"Today the touch points with consumers have changed — both in numbers and nature, requiring major adjustments to align strategy and budgets to where consumers are actually spending their time," Singh points out.
"At Kebab Xpress, apart from adopting various traditional touchpoints, we engage customers with our online ordering platform, interacting with consumers through Facebook, Twitter and blogs. We shall be shortly launching an app, which is a natural progression to the digital medium," he adds.
Like Kebab Xpress, Natural is also trying to strengthen their technological upgrade with the launch of an interactive application."The idea is not to create a conevntional app where customers can order ice-creams or browse through our flavours. We are looking at creating an interactive platform for consumers, that would provide a mix of utility and information in a few clicks," Kamath elaborates. "We will be able to come up with the application by end of this year or early next year." 
Menawhile, the brands have also understood the importance of connecting with consumers through online social media.
WOW! Momos feels it’s important to be in touch with the consumer all the time. "We are quite active on Facebook and Twitter; each feedback posted by customers or any reviews that they post on different platforms are addressed and implemented," Daryani says.
 
"We have over one million fans on the Cocoberry Facebook page. We are also looking at e-commerce sites to distribute our new range of low-fat ice-creams, which will enable us to expand in an asset-light manner," Deans concludes.
Deep pockets, supply chain efficiencies and extensive global consumer insights are the mainstays of foreign-born QSR majors’ expansion success. Having said that, domestic Indian brands too now look fairly aggressive, with rising investments in back-end technology and consumer marketing becoming more ubiquitous, leading to cautious optimism among home-grown QSR entrepreneurs.
"India’s huge population and easy-on-the-pocket prices of domestic QSR chains makes for a deadly combination," asserts Iyer. "If not the entire billion plus population, Goli Vada Pav will be able to engage a fairly large chunk with its strong understanding of Indian tastes and preferences." concludes Iyer.

Latest News

The Luxottica report card for 2022

A look at how the world’s largest eyewear company fared in terms of revenue growth in key regions across...

Login to your account below

Fill the forms bellow to register

Retrieve your password

Please enter your username or email address to reset your password.