MUMBAI: Fast food brands in India are benefitting from a pick-up in the economy and a youth population with more money to spend, according to a new report, as competitors stake their claim in the growing category.
According to a Euromonitor report, India’s fast food category is expected to balloon to US$25 billion by 2021, up from $20 billion in 2016. The market has grown by 50% in the last ten years.
An ongoing legal dispute with a leading franchisee has seen the expansion ambitions of McDonalds - a long time player in the category - throttled in parts of India, leaving room for competing brands to capitalize on category growth.
Domino’s, the international pizza chain, has been one beneficiary. While the market remains dominated by small hawkers and vendors, Jubilant Foodworks, - the Indian franchisee for Domino’s - has said the company is on course to have opened at least 30 more Domino’s stores this financial year. The pizza chain already has more than 1100 stores across India, in 265 cities.
“There is significant potential for the pizza business in the country, and we are committed to leveraging that potential,” Jubilant’s Chief Financial Officer, Pratik Pota, told analysts and investors in January, according to comments reported by the Economic Times.
India’s mobile phone and internet revolution has been a major engine of growth for the brand, with online ordering taking off among Domino’s customers in India.
“As technology gets embraced across the pop strata, as smartphone penetration increases, I’d expect this growth to continue,” Pota said in January.
The stock market is also optimistic about the fortunes of Jubilant as it attempts to take market share from competitors – the company’s share price climbed 33 percent in Mumbai trading over this past year, making it the best-performer on India’s S&P BSE 200 Index. Likewise, Jubilant’s profit more than tripled in the quarter to Dec. 31 from the previous year.
Sourced from Bloomberg, Economic Times; additional content by WARC staff