In this article, we embark on a culinary expedition to explore the top five key players in the Indian QSR industry. We’ll delve into their store count, revenues, and other essential details, all while examining the potential challenges they face in this bustling market
Mumbai: The quick service restaurant (QSR) industry in India is not merely about grabbing a quick meal, it has evolved into a dynamic sector catering to the diverse tastes and preferences of millions. From global giants to homegrown favourites, QSRs have become an integral part of India’s culinary landscape.
A projection report by Statista indicated that in FY 2020, India’s QSR industry boasted a market valuation of approximately Rs 188 billion. Further in the report, it was claimed that this figure is set to soar, surpassing the Rs 500 billion mark by 2025. This substantial growth owes itself to the increasing familiarity with Western culinary influences and culture, coupled with a rise in disposable income, which has propelled this sector forward.
In this article, we embark on a culinary expedition to explore the top five key players in the Indian QSR industry. We’ll delve into their store count, revenues, and other essential details, all while examining the potential challenges faced by them and the emerging QSRs in the market.
Domino’s Pizza India
Incorporated in 1995, Jubilant FoodWorks Limited holds the exclusive master franchise rights from Domino’s Pizza Inc. to develop and operate the Domino’s Pizza brand in India, Sri Lanka, Bangladesh, and Nepal. With an impressive network of around 1,890 Domino’s stores spanning 394 cities, Domino’s not only has the maximum number of locations in India but also boasts a presence in almost all cities with over 10 lakh residents. The revenue from operations for Jubilant FoodWorks Limited in FY22 stood at Rs 4,331.1 crore. Net profit for FY22 grew by 85.9% YoY. Net profit margins grew from 7.0% in FY21 to 9.7% in FY22, according to the company’s website.
Pizza Hut
Pizza Hut secures the second-largest store count among Indian QSRs, with a presence at 788 locations across the nation. Under the ownership of Yum! Brands Inc, Pizza Hut operates within a multinational restaurant conglomerate overseeing over 55,000 restaurants across 155 countries and territories. In India, the brand operates through Devyani International Ltd. and Sapphire Foods India Ltd., with an annual revenue of approximately Rs 5.3 billion in FY22.
KFC India
Sapphire Foods is one of the two franchises that owns and operates KFC restaurants in India, the other being Devyani International. The company, founded in 2015, manages over 460 KFC stores across 81 cities in India. KFC, a global chicken restaurant brand, opened its first India outlet in Bengaluru in 1995. In FY22, KFC’s annual sales revenue in India exceeded Rs 10 billion.
McDonald’s India
Westlife Foodworld Ltd operates QSRs in India through its subsidiary, Hardcastle Restaurants Pvt. Ltd. (HRPL), under a master franchisee agreement with McDonald’s Corporation USA. HRPL has been a franchisee in the region since its inception in 1996. HRPL serves over 200 million customers, annually, at its 361 (as of June 30, 2023) McDonald’s restaurants across 56 cities in the states of Telangana, Gujarat, Karnataka, Maharashtra, Tamil Nadu, Kerala, Chhattisgarh, Andhra Pradesh, Goa and parts of Madhya Pradesh and Union Territory of Puducherry. McDonald’s operates through various formats and brand extensions including standalone restaurants, drive- thrus, 24/7, McDelivery, McBreakfast and dessert kiosks. The total revenue for McDonald’s in India exceeded Rs 15 billion in FY22, managed by Westlife Development Private Limited (WDL) through HRPL for west and south and Connaught Plaza Restaurants Private Limited (CPRL) for north and east.
Wow Momo
Founded in 2008 by Sagar Daryani and Binod Homagai, Wow Momo is a rapidly growing Indian fast-food restaurant chain based in Kolkata. From its beginnings, it has expanded to over 600 outlets in around 30 cities, with plans to add approximately 250 new outlets in the fiscal year 2024. It experienced significant revenue growth, more than doubling its revenue from operations to Rs 219.8 Crores in the fiscal year 2021-22, compared to Rs 106 Crores in the previous fiscal year.
Challenges
Intense Competition: The market’s high competitiveness necessitates constant innovation to stay relevant. Established players like Domino’s, Pizza Hut, and KFC face tough competition from new entrants who aim to capture a slice of the market.
Quality Control: Maintaining consistent food quality across a large network is a daunting task during rapid expansion.
Changing Consumer Preferences: Meeting evolving dietary preferences while staying true to brand identity is crucial.
Real Estate Costs: Prime locations come at a premium, impacting overall operational costs, especially in urban centres.
On the other hand, there is a burgeoning wave of emerging QSRs that have gained popularity among consumers. Notable names in this category include Burger Singh, Chai Sutta Bar, and Burger King, among numerous others.
“We have competed with international brands from day one, simply because it was always our goal to become a national chain. Despite very limited marketing budgets and limited economies of scale, we positioned ourselves competitively. Today, we’re at 150 outlets in 60 cities, we have nearly matched the operational economies of international counterparts,” said Rahul Seth, co-founder, Burger Singh.
“QSRs must adapt to the new normal by improving online ordering, delivery, and takeout services. This includes investing in a strong technological infrastructure, user-friendly mobile apps, and effective distribution networks. To inspire consumer confidence, QSRs should also focus on maintaining excellent sanitation and safety measures at their locations,” Anubhav Dubey, founder, Chai Sutta Bar, stated in a Financial Express article.
These rising stars in the QSR landscape, while making their mark, also find themselves in the midst of robust competition posed by the established top players in the industry.
“When we enter a new region of the country, where people aren’t as familiar as they are in the regions in which we’ve been present, there is still the challenge of gaining customer trust and getting them to experience the product,” Seth added.
The Indian QSR industry is a dynamic sector marked by innovation, rapid expansion, and a commitment to providing diverse culinary experiences. While challenges exist, including competition and quality control, the potential for growth and success remains immense for the present and upcoming QSRs in the industry.
