US fast food brands like Carl’s Jr, Johnny Rockets, Burger King, Wendy’s, Johnny Rockets and Barcelos have recently came into India to join the growing fast food market. With that, they joined the race to compete with global brands already in the country, including McDonald’s, KFC and Pizza Hut, all of which have been in India much earlier. In order to keep pace with the on-going competition, they too have re-strategized their business approaches while focusing on quality and profits.
The fundamental success of Indian QSRs is in offering a menu that is diverse enough to appeal the customers’ pan-India. Moreover, the burgers and fast food that the local restaurants offer are affordable for the pockets of domestic customers; thus making it difficult for the global brands using Indian franchisees to toss up a menu at that price. With the growing appetite for fast food in India, competition is increasing with the increase in demand for roadside vendors against organised QSR chains with their range of delectable snacks at a price as low as Rupees 25.
Another issue that these international fast food chains come across is the high real-estate cost with the market over saturated. It is a bigger challenge to choose the right multiplexes with high customer attraction.
The concept of QSRs took off in India around 20 years ago with the entry of McDonald’s in the year 1996, and the sector has seen a massive makeover since. Currently, 60% of the QSR market in India is dominated by foreign brands.
With today’s intense competition where too many food chains are locked in a battle to attract the customer, it has become essential for all business players to re-invent their business outlook. This explains the reason why most global chains are tailoring their offerings in terms of the flavours, pricing and services. Their efforts include alter vegetarian menus, offering no beef based products, sometimes even establishing different cooking areas for vegetarian and non-vegetarian food preparation. To meet the Indian consumers’ tastes and preferences, even the mayonnaise served in McDonald’s in India is eggless.
At a time when both national and international QSRs are trying to build on the growing fast food appetite of Indian customers, a host of online food portals are busy trying to control costs and sustain investor interest. Recently, online food ordering startup, Foodpanda was in the news for laying off 50 per cent of its workforce and Zomato announced layoffs of 300 employees.
But the outlook for the food and beverages franchise market remains strong with a wide variety of choices for the people. According to a research, half of India’s population eats out at least once in every week. So, with competition increasing in the industry, both national and international fast food chains will be aiming to draw in new consumer segments.
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