Feeling the density,intensity and competitiveness of the operations at home, KFC has trained its sights on the Indian sub-continent.
In October,after opeining close to 500 outlets in Malaysia, KFC opened its third branch in India in Mumbai again-right in the the hub of both entertainment and hi-finance. This is its second branch in Mumbai . It opened the first in June.
Both these outlets were opened on the heels of the opening of an outlet in the educational-cum-cultural hub of Pune which opened in April.
KFCH’s vision is to become the largest integrated food services group in the Asia-Pacific.
India is KFCH’s first venture outside South-East Asia. The company now has 75 outlets in Singapore, eight in Brunei and nine in Cambodia.
KFCH views India with great optimism because the world’s second-most-populous country offers sustainable business growth.
A KFC spokesperson says the Indian consumer market is considered underdeveloped, as it now has about 1,200 brand restaurants in a country with a population of about 1.13 billion.
There is a large consumer base in India, with its emerging middle-class driving consumption for food and entertainment, while 50% of the population are under 25 years old.
“KFCH stands to reap growth prospects for strong organic growth in India, with Mumbai and Pune having a combined population of about 26 million,” he said.
“We can emulate KFCH’s success of a fully integrated operation, delivering consistent support services, reliable source of quality chicken at competitive prices and most importantly, its ability to supply the growing demand for halal chicken,” he adds.
In India, KFCH sources it halal chicken from a local processing plant, Venky’s India Ltd.
The KFC spokeperson said that the Indian venture would also allow KFCH to diversify its earnings base besides reducing its dependency on the Malaysian and Singapore markets.
KFCH’s inroad into India was made possible following an offer from Yum! Brands Inc, the master franchisor of the KFC brand, to develop the franchise in the state of Maharashtra, where both Mumbai and Pune are located.
KFCH will focus on developing its chain of outlets in Maharashtra before looking at other states in India, noting that Maharashtra, which is on the west side of the subcontinent, offers vast opportunity with a population of about 100 million.
KFCH sees exciting times ahead in India. The company plans to have a total of 17 outlets by the end of next year, including five in Mumbai that it would acquire from Yum! Brands.
KFC does not rule out the possibility of KFCH acquiring the remaining KFC franchisees in Mumbai. Apart from the five KFC outlets to be acquired from Yum!, there are now four stores owned by three other franchisees in Mumbai.
“Mumbai and Pune will be our launch pad into India. We’re here to stay for the noble and collective good of all,” he says.
Mumbai Chicken Pte Ltd chief executive officer Hezal Ahmad says KFCH’s outlets in India would be targeted mainly at the youth market. Mumbai Chicken is a member of KFCH.
He says it will also cater mainly to the high-income population which offers better profit margin.
KFCH has maintained its existing KFC image in its outlets in India. However, the interior of the restaurants has been designed to give the right ambience for the youth.
Hezal says total poultry consumption in India is growing by about 5.5% a year while consumption per person rose to 2.1kg in 2008 from 1.4kg in 2003.
However, the 2.1kg consumption per person is still much lower than Malaysia’s which stood at 38kg in 2008.
“The modern lifestyle, increasing number of fast-food outlets, higher number of youngsters and the availability of processed chicken products in the market are boosting chicken consumption in India,” he says.
According to Hezal, KFCH outlets in India will be located mostly in shopping malls with cinemas so as to get nearer to its target market and to capture a bigger traffic.
For example, its first and only outlet in Pune so far is within the Deccan Mall, which is a prime zone for eating and surrounded by 13 colleges.
Pune, a city about four hours drive from Mumbai, is home to about 90 colleges.
With a population of some 5.7 million, of which two million are students, it offered a huge youth market for KFCH to tap.
Hezal says KFCH outlets in India serve vegetarian and non-vegetarian food. The company is developing more non-vegetarian food to add to its menu.
Currently, non-vegetarian food contributes 95% of sales while vegetarian food 5%.
All KFCH outlets in India are run by Indians. Last year, the company sent 14 people from India to be trained as restaurant managers at its Malaysian outlets.
Expect KFC to bring home the Indian harvest soon!
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