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05Sep
2014
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Indian QSR Industry – The Fastest Growing Segment in the Eating out Market

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Quick Service Restaurant (QSR), also known as Fast Food Restaurant, is a specific type of restaurant characterized by both fast food cuisine and minimal table service. The Indian QSR industry is growing rapidly at a rate of 25-30 percent. It is a reflection of the change in the standard of living, food habits and consumption pattern of the people. The frequency of dining out, ordering food from home and takeaways from restaurants has created an opportunity to cater to a great mass of population. Indian QSR market is one such sector that has not collapsed under the pressure of increased price levels of goods & services and slow economic growth; rather, it has massively grown. Quick Service Restaurant Industry in India has become the fastest growing segment in the eating out market.

Eating out is gradually becoming more of a routine necessity for the majority of people. Families in Tier I cities spend Rs. 6000 per year on eating out, where as families in tier II spend Rs. 1,500 to Rs. 2,000 per year. This spending is expected to grow significantly in upcoming years. Hence, total spends on quick service restaurants may amount to Rs. 2, 500 crores in Tier I cities and Rs. 510 crores in Tier II cities. The major reason for a greater interest in Indian QSRs is that the food in quick service restaurants is pre-pared and comes ready-to-serve. The systems and processors used are highly standardized. Even malls, food courts and multiplexes have become a preferential destination. Bigger restaurants are teaming up with small QSRs to set-up their brand.

Various Strategies Followed By Indian Quick Service Restaurants

Pricing Strategies

  • QSRs concentrate on keeping lower margins on the base product and higher margins on the side orders to satisfy the price conscious consumers. At the same time, it allows the QSR to charge the customers, for whom price doesn’t matter, through side orders.
  • QSRs price their product very carefully because of the strong competition that they face. Most of the Quick Service Restaurants in India keep popular brands in their menu list to remain competitive.

Marketing Strategies

  • Quick Service Restaurants in India play on their strengths to create a brand promise. The brand promise can vary from fast food to low prices to healthy food.
  • QSRs take their brand promise very effectively to the masses.
  • In order to maintain the best food experience, the service, menu items and interiors are standardized.

Growth Strategies

  • Growth is achieved based on volumes. Hence, QSRs always look forward to expand their presence.
  • Quick Service Restaurants understand the preferences and purchasing behaviors of customers to make informed decisions.
  • QSRs use the demographic data to better understand the dynamics affecting unit-sales performance.

International QSR Brands in India

Many international QSR brands like Subway, Pizzahut, McDonalds, etc. are making inroads into Indian QSR market. The increasing acceptability of foreign QSR brands by the Indian consumers is remarkable. These brands are attracting lot of attention due to exposure to western culture, rapid urbanization and changing lifestyle.

Indian QSR brands in Foreign Countries

The lack of back –end integration, distribution channels, centralized commissaries, training resources, vendor development, capital backing and most importantly standardization in taste have kept Indian Quick Service Restaurant brands from venturing out. In order to expand their business in global QSR market, many Indian QSR brands like Nirula’s Kaati Zone, Haldiram’s, etc. have started adapting to the Indian cuisine into a fast-food, without compromising on the quality and taste.

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