Warc, 15 May 2014
NEW DELHI: India's fast food market is growing rapidly and
reaching beyond metros into Tier 2 and 3 cities new research has shown.
A report from the Associated Chambers of Commerce and
Industry of India (ASSOCHAM) said that the quick service restaurant market had
been largely unaffected by the economic slowdown and had grown by 43% in the
past year to reach almost $50bn.
"The factors propelling this buoyancy include the
changing economic and demographic profiles of consumers in India," said
ASSOCHAM secretary general D S Rawat.
In particular, the annual spending of middle-class
households in Tier 2 and 3 cities had more than doubled over the past two
years, from Rs. 2,500 to Rs. 5,200. In comparison, spending by the same
economic group in Tier 1 cities was up just 35% over the same period to Rs.
6,000.
Rawat also identified younger consumers as a key driver of
growth, pointing out that more than 65% of the population was under 30 years of
age. This group was also more exposed to global media and international brands
and was keen to try new things.
Indian consumers were showing an increased propensity for
eating out, averaging eight times a month, although this was still behind other
countries in the region. China stood at nine times a month and Thailand at ten.
ASSOCHAM further noted the growing demand for convenience
with the rise of the 'nuclear family' and more women working outside the home.
Increasing literacy, higher disposable income, the greater
availability and penetration of a variety of consumer goods into the interior
of the country were combining, said the report, to "create lifestyle and
aspiration levels on a par with other fast-moving metropolitan cities".
Another factor the report did not address but one which
exercises international brands is that of localisation. Both Dominos and Burger
King have adapted their menus to suit local tastes and in the case of the
former half its Indian offerings are localised.
Rawat declared that future of the Indian fast food industry
lay in lower tier cities which offered better growth prospects for brands facing
increasing competition and rising costs in metros and Tier 1 cities.
Data sourced from ASSOCHAM; additional content by Warc staff
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