We told you a week ago how Yum! Brands is planning to spend $150 million to more than double its presence in India, to 1,000 locations by 2015.
As we reported, Niren Chaudhary, managing director of Yum! Restaurants India Pvt. Ltd., told reporters at an industry event, “The company is aiming at total sales of $1 billion from India by 2015.”
But how reasonable? After all, fried chicken, pizza and tacos are essentially Western tastes. Indian food is spiced much differently and a good portion of the country is vegetarian.
Will the huge sub-continent support such aggressive expansion.
The answer, we’re told, is an unequivocal “Yes!”
“KFC, Pizza Hut and Taco Bell are very successful with the young here in India,” I was told by Surender Gnanaolivu, vice president of store development and presentation for Mahindra Retail Pvt. Ltd., a Bangalore-based conglomerate with its hands in several aspects of Indian retailing and business. “And remember, half of India’s population is below 25 years of age.”
I’m not surprised.
I’ve driven through Dubai, Peru, Brazil and India, and have always been impressed with the presence of KFC. A cab driver in Barcelona, Spain, once asked my wife and me where we were from.
“Louisville, Kentucky,” we said and he got a big smile on his face. We expected him to say, “Oh, the Kentucky Derby.” But instead he said, “Ah yes, chicken!”
The biggest thing Yum seems to have going for it in India’s huge subcontinent of more than 1 billion people is the affection Indians have for the West. They adore Western brands, styles, apparel, culture and foods.
They’re increasingly aware of U.S. styles through 24-hour exposure on TV and the Internet; the rise of tourism that brings Americans to India and Indians to the U.S.; and the growing cross-fertilization of cultures as more Indians come to the U.S. for education and work and more American companies outsource work to India.
Yum will also be buoyed by India’s growing, upwardly mobile, middle class, which is expected to swell to 267 million people in the next five years. That’s up 67 per cent from the current levels.
So no adjustments necessary for India’s particular culinary tastes? “They have already worked it out with some part of the menu in local flavors,” said Gnanaolivu, “such as chicken tikka burgers and pizzas.”
What about India’s vegetarian tradition?
Actually, only 20 percent of Indians are vegetarian, “and the rest enjoy all kinds of food,” Gnanaolivu said.
The biggest mistake Yum could make, said Gnanaolivu, is trying to make its offerings too Indian. “The awareness of Yum’s brands in India is very high and, in fact, Indians prefer them in their American form,” he told me. “When Tommy Hilfiger came to Indian retail, it tried localizing its store experience and the Indian consumer rejected it!
“They want the American experience. Yum Brands cannot underestimate that. Fail to give Indian consumers something very American and they’ll go elsewhere – they have lots of other options and money to spend.”
Already, fast-food dining in sit-down restaurants is thriving in India’s cities. “McDonald’s is very popular,” said Gnanaolivu, “and is given prime locations in high streets and ground floor front’s of malls – and they are always full.”