Category — Tourism & Hospitality
Adapting and making changes to suit a particular culture is one of the secrets to succeeding in new markets.
Amit Jatia is the man responsible for McDonald’s phenomenal growth in the Indian market since the company first contacted him in 1994. His business has 174 McDonald’s across 17 cities in India and is counting.
McDonald’s was willing to localize, and so, respecting the sentiments of Hindus and Muslims in the country they promised that there would be no beef or pork on the menu. The Big Mac beef burger, the company’s signature product, was replaced by the Chicken Maharajah Mac.
Perceptive of the fact that many Indians are vegetarians, and being a vegetarian himself, Amit has introduced a 20 rupees (35c) Aloo Tikki Burger, a burger with a cutlet made of mashed potatoes, peas and flavored with Indian spices. “It’s something you would find on Indian streets, it was essentially the McDonald’s version of street food. The price and the taste together, the value we introduced, was a hit. It revolutionized the industry in India,” he says.
McDonald’s doesn’t have the Indian fast-food market to itself:
- Domino’s Pizza has more than 500 restaurants across India
- KFC has more than 300 restaurants
- Dunkin Donuts has more than 30 outlets in India
- Burger King has just opened its first restaurant in Delhi and other outlets are reported to be opening shortly – it too has dropped pork and beef from its menu
Originally Amit was the local partner in the south and west of India, running the chain as a joint venture with the global McDonald’s company. Later he bought out the McDonald’s stake and now solely runs the chain in the south and west of the country. The journey hasn’t been an easy one since Amit has had to adapt the business and infrastructure to a uniquely Indian market. He has segregated kitchens for vegetarian and non-vegetarian food. “All the kitchen fabrication, the refrigeration, chillers and freezers and furniture are made locally,” he explains. In most cases McDonald’s global suppliers have worked with local businesses to make that happen. Amit wants to take it further. His current challenge is to make fryers locally. Overall he has managed to grow same-store sales by 200% and he says he’s not done yet. The plans are to open another 1,000 restaurants in the next decade.
McDonald’s in India has another partner in the north with whom they are entangled in ownership issues. On asking Amit Jatia how he managed to get around it, the MBA from the University of Southern California said, “There are a lot of regulatory approvals needed to get something done. But that is known. Once you know it, you factor it into your business plan.”
November 21, 2014 No Comments
Burger King was yet to open its first outlet in the country, yet over 1,200 Indians had already pre-ordered the chicken, mutton or veggie versions of its Whopper sandwich for 128 rupees (just over $2) each. Online shoppers then collected their orders in a separate line when the store opened in New Delhi’s Select Citywalk Mall on November 9.
Pre-ordering has become a bit of a craze in India, and Coca-Cola India launched its Coke Zero exclusively through pre-orders on Amazon. Burger King entered India almost two decades after its competitor McDonald’s. Honoring the sentiments of Hindus and Muslims, the chain will not offer any items made of beef or pork. And, just as McDonald’s has done, Burger King too will Indianize its menu by including dishes made of paneer or cottage cheese that is so popular in India.
Burger King’s late entry may not be a constraint in a country where fast food is in hot demand. The segment is dominated by Western players as Indian food does not easily lend itself to the standardization demands of fast food chains. India’s organized fast food market is expected to grow to $8 billion in 2020 from $2.5 billion in 2013. Even though digital commerce is in its infancy in India, it is one of the fastest growing e-commerce markets in the APAC region according to Gartner which predicts it will hit $6 billion in 2015 – a 70% rise over 2014 revenues of $3.5 billion.
November 11, 2014 No Comments
India’s new Prime Minister Narendra Modi is seeking to boost inbound tourism. Taking cognizance of the improved business climate, Bloomberg News reports that international hotel chains are expecting improved occupancy rates in the mid-market segment of the second- and third-tier cities and towns of India, and are aggressively planning to set up new properties.
The owner of Holiday Inn, Intercontinental Hotels Group, which has 18 hotels in the South Asian country, plans to add 46 more over five years. Clarence Tan, senior vice president of development for Asia, Middle East and Africa said in an interview, “I am excited about the new leadership in India and the progress expected with it. It’s been rocky for a while, but I don’t think you can ignore India with its emerging middle class and huge labor force.”
Wyndham announced the signing of 10 properties in India on October. 10, while Starwood will almost double the hotels it operates in India by adding more than 30 hotels to the existing 40 in the country. Carlson Rezidor Hotel Group plans to open more than 130 new hotels in India over the next 10 years.
“Occupancy levels are likely to increase in the coming years with rising foreign tourist arrivals and strong domestic tourist volume,” said P R Srinivas, a director of hospitality at Cushman & Wakefield Inc.’s local unit in Gurgaon near New Delhi.
November 4, 2014 No Comments
Starwood Hotels & Resorts, the owner of Westin and Sheraton, is seeking to expand to 100 properties in India by the end of 2015.
While six of Starwood’s nine global brands — Westin, Le Meridien, Sheraton, Aloft, Four Points by Sheraton and The Luxury Collection in partnership with India’s ITC Hotels — are already in India, two more — St Regis and W — will make an entry into the country next year. Element, the company’s extended-stay sustainable brand will be introduced to India in 2016-17.
“We already have 40 hotels across the country, which are managed and franchised by Starwood and have signed deals for 32 new hotels which are currently under development.” Dilip Puri, Managing Director – India & Regional Vice-President – South Asia, Starwood Hotels & Resorts, told Business Line.
Puri pointed out that Tier 2 and Tier 3 markets including Vishakapatnam, Coimbatore, Kochi, Dehra Dun, Jaipur, Ahmedabad and Chandigarh will be targets in the near future. Starwood has identified a new growth opportunity in converting existing hotels which have closed down around the country into Starwood brands along with the infrastructure partners. “We have converted four hotels, one each in Dehradun, Delhi, Ahmedabad and Bangalore into Four Points by Sheraton,” said Puri. The latest one launched in Bangalore last month is owned Desai Brothers Ltd and managed by Starwood.
July 15, 2014 No Comments
India’s Cox & Kings has entered into a cooperation agreement with G Adventures, the largest small-group adventure travel company in the world, to offer the Canadian firm’s sustainable and adventure tour packages to Indians.
To kick-start this venture, the partners have launched the ‘Grab Your Dream’ contest, which will give aspiring travellers a chance to win an all-expense paid adventure trip. This year G Adventures is aiming to get 10,000 tourists to India, and now it is seeking to source Indian outbound tourists to adventure destinations across the world, including the Amazon forest and Moroccan deserts.
Adventure tourism is a relatively nascent concept in India, and is largely unexplored.
“India is experiencing rapid growth in terms of outbound tourism and with global demand for adventure travel also continuing to grow, now is time to introduce it as a new way to see the world,,” G Adventures Founder Bruce Poon Tip said. “Our job is to create awareness. It will take us nearly a year to achieve any sizable number. We are at the helm of a digital euphoria, wherein travellers are adventurous,” Ezeego1.com COO Neelu Singh said.
March 29, 2014 No Comments