Franchising, retail, business
01/10/2014
With just Rs 19 million in revenue and a measly 0.3 per cent market share in 2001, who would have thought that American fried chicken chain KFC would become a strong No 3! "We want KFC to be a brand for anyone at any time," says Niren Chaudhary, president of Yum! Restaurants, which also licenses quick-service chains Pizza Hut and Taco Bell to franchisees.
KFC had 21 outlets in 2006. While it took four years to reach 100, the next 100 happened in just two years. Now its store count stands at 307 and it has set an ambitious target of 1,000 stores by 2020.
What has made KFC click so fast in India, especially after it's not so memorable debut? Five factors, says Chaudhary. "Being broadly relevant, deeply accessible, youthful, innovative and aspirational have helped KFC carve a special place among youth," he says, adding that the brand is on track to become the No 1 burger player.
More known for its non-vegetarian offerings, KFC broke off those perceptions and established itself as a choice for everyone, feel marketing experts. Product innovations, including vegetarian and non-vegetarian menus and even meal options like rice, helped it expand its reach, says Sharma of SP Jain Institute.
Clever localisation along with consumer education also boosted performance. KFC showed that they have a separate vegetarian and a non-vegetarian kitchen. "This instantly addressed some of the cultural issues that the brand faced," she says.
For Chaudhary, the threat is not from McDonald's or Domino's. "Street food is our biggest competitor," he says. What we are looking at, he explains, is the $90 billion plus eating out opportunity. Only 2 per cent of it is organised. "So there is room for all to grow."
Domino's India ( Entry in India: 1996)
Number of products: 40+
Price range: Rs 49 to Rs 665 (Serves 4 people)
Top three products: Cheese burst pizzas, Seven Heaven Pizzas, Choco Lava cake, Taco Mexicana
India Innovations: Pizza Mania, Taco Mexicana, Peppy Panner Pizza, Chef's Veg Wonder
Domino's Global Store Count: 11,000+ | US 5,000+ | UK 790+ | Australia 515+ | China 45+
Breakup of Dine-in and Home Delivery in per cent: 50 per cent delivery and 50 per cent dine-in
The India Plan
- Has 772 restaurants across 158 cities (as on 6th August 2014).
- Will launch 150 new stores by FY15; already rolled out 46.
- Creating higher levels of customer satisfaction via innovative offerings.
- Has over 6.7 million+ fans on Facebook.
- Launched online ordering (OLO) system in 2011 and mobile ordering app in 2012.
- Average OLO contribution to delivery sales in Q1 FY15 was around 21.8 per cent and Mobile Ordering sales contribution to overall OLO was around 21.5 per cent.
- Has 1.8 million downloads of mobile ordering app across various smartphones.
McDonald's India ( Entry in India 1996)
Number of products: Over 80, including breakfast and McCafe menu.
Price range: Rs 25 (for an Aloo Tikki Burger) up to Rs 140 (for the Grilled Chicken Royale Burger).
Top three products: McAloo Tikki, McVeggie & McSpicy Chicken.
India Innovations: McAloo Tikki Burger, Pizza McPuff, Maharaja Mac, McSpicy Paneer, McVeggie Burger, Masala Grill Burger and McRoyale Burger.
McDonald's Global Store Count: Over 35,000 in 100+ countries | US: 14,200 | China: 1,900 | UK: 1,200 | Australia: 920
Breakup of Dine-in and Home Delivery in per cent: Online delivery starting to take off; almost 25 per cent of revenues come from online and web ordering.
The India Plan
- To open 175-250 restaurants in the next 5 years across West and South India
- To establish 60 per cent-70 per cent of outlets in existing cities and the rest in new markets
- Will invest over Rs 750 crores
- Plans to open 75-150 McCafe in the next three years
- Store-in-store format means faster consumer connect
- Most of the recent openings have been Drive-throughs
- Has optimised delivery business by enhancing online capabilities
- Almost 25 per cent of revenues come from online and web ordering
- McCafe acts as a key driver in optimising use of restaurants
KFC India ( Entry in India 1996)
Number of products: 30+
Price range: Rs 25 to Rs 500 (Bucket for 3 people)
Top three products: Chicken Bucket, Zinger Burger, Krushers
India Innovations: Paneer Zinger, Rice Bowlz, Sparkling Krushers
KFC's Global Store Count: 13,000+ | US 4,000+ | China 4,000+ | Australia 600+ | UK 900+
Breakup of Dine-in and Home Delivery in per cent: 50 per cent of stores deliver and 10 per cent of sales in these stores is home delivery
The India Plan
- To take store count to over 500 by 2015 and over 1,000 by 2020.
- Enter over 100 new cities by 2015.
- 50 per cent of stores offer home delivery service, growing at 20 per cent YOY.
- Launched online ordering and mobile app in 2014.
- Yum! India plans to have over 50,000 associates in India by 2015.
- No 1 QSR brand with over.
- 7 million fans on Facebook.
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