Which brand comes to your mind when I say pizza? Most of us get mouth-watering Domino’s pizza. Let us understand how Domino’s started Indians to taste pizza where traditional food was favorite among Indians. In was mid-80s 80 Domino’s was the fastest-growing pizza chain in the United States. It began expanding globally, and then it got the attention of India after the 1991 globalization
FIRST STORE :
When Domino’s Pizza entered the country – in 1996, It opened its first store in Delhi – few people in India had even tasted a pizza; the item was only available in a few high-end restaurants. The first five years saw only 50 Domino’s outlets set up across India, and that too only in the metros. There was minimum focus on growth. Domino’s tried to understand the Indian consumer and create brand awareness.”
FAILURE :
Despite the preparation, the company had to take some hard knocks. In 2000, it embarked on its first big expansion spree, increasing the number of outlets to 100, and moving into tier-II towns like Bhopal and Gwalior. Much went wrong and 40 outlets had to be closed in the next two years. Even in 2004/05, the then Domino’s India Pvt Ltd was losing money – it posted a loss of Rs 57.8 lakh that year on a revenue of Rs 73.7 crore
COME BACK OF DOMINO’S :
It was at this stage that Ajay Kaul was brought to head the Indian operations. Then he understood that the lack of demand for pizza and operational inefficiencies were causing the failure. To create efficiency Company started training the staff and ensuring proper infrastructure was in place. Domino’s bounced back. Soon after taking over, Kaul hired a number of top-class professionals to turn the business around. He forged exclusive partnerships with ingredient suppliers, truck owners, and cold chain warehousing firms. All measures paid back. Domino’s has adapted the following strategies to grow.
30 MINUTES OR FREE :
Domino’s launched an American marketing strategy for 30 minutes or free in 2004. This is the one which attracted massive attention from the consumers. To this day 99% of the deliveries happen within the promised time.
INDIANISING THE MENU :
Over the years Domino’s has learned the fact that targeting regional audiences is only possible by adding some local taste in the flavors. Domino’s conquers the Indian market by offering options like Peppy Paneer, Kebab Pizzas, and Cheese Burst Pizza. In addition to such unconventional pizzas, it also offers garlic bread, choco lava cake, pasta, and wraps. To keep the success rate high, Domino’s has been continuously expanding its menu with a perfect mix of Indian and Western tastes.
EXCITING OFFERS & AFFORDABILITY :
Domino’s Pizza was considered an expensive brand. Knowing India’s value-for-money psychology, Domino’s offers exciting offers and combos at affordable prices for every type of customer. It has taken every possible cost-effective measures from sourcing the raw materials to supply chain management
STORE EXPANSION :
At most of the stores, Domino’s offers a large dine-in space. The locations of stores throughout the country are situated by keeping factors like traffic flow, market, footfall, ease of delivery service, and parking space in mind. It expanded from 1 store in 1996 to 1335 stores in 2020 which is the biggest market outside the US for Domino’s
ONLINE ORDERING :
Domino’s was the first one in the country to launch online ordering in India in 2012. Now 86% of the delivery sales happen through online orders. Domino’s app has 33.1mn downloads.
Domino’s Pizza has become a household brand for Indian consumers. Now even it is expanding to Tier-II and III cities. No wonder Domino’s will reach villages in India in the next decade thanks to infrastructure, internet, and E-commerce penetration.
ROAD AHEAD :
According to the National Restaurant Association of India(NRAI), the Indian food service industry is estimated to grow at a Compound Annual Growth Rate (CAGR) of 9% to reach 5.9 lakh crore by FY 2023. Indian society is evolving with the rise in the working population, nuclear/individual households, and more outdoor activities such as leisure trips and outings with friends, families, and colleagues. These factors are driving the frequency of eating out. There is an increased brand consciousness and people want to experiment with new cuisines, which is contributing to the country’s expanding food service sector and the dominance of full-service restaurants in India. However, the COVID-19 pandemic and the ensuing nationwide lockdown have adversely impacted the overall food service business in varying degrees (Source: the NRAI).
In the food service industry, the trusted credible brands in the organized service sector are expected to gain market share while the unorganized sector shrinks. As per the NRAI, four out of every 10 restaurants will likely be permanently shuttered in the absence of a government bailout
GROWTH DRIVERS: Evolving Demographics :
In recent years, there has been a rise in the number of independent households and nuclear families as a direct result of the changing cultural dynamics and evolving family structures. This evolution has led to an increase in alternative (non-home-cooked) food consumption. Additionally, a large workforce and employment opportunities brought about by economic liberalization are leading to higher discretionary spending on eating out and dining in.
Digital Inclusion and Rise Of E-Commerce :
By FY 2030, over a billion Indians from rural and urban areas are expected to have internet access. Digital inclusion is likely to further propel India’s consumption growth trajectory while improving awareness about health, lifestyle, and brands, among others (Source: World Economic Forum). These factors, along with the country’s booming e-commerce sector and budding food aggregator industry, will offer new and exciting opportunities to the organized food service sector and QSR market
Changing Consumer Preferences & Rapid Urbanisation :
Urbanization has triggered a transformation in the consumption pattern, including food habits. These consumers seek convenience, explore culinary experiences, and prefer eating out. The emergent Quick Service Restaurants (QSR) industry and the ready-to-cook/ready-to-eat segments of the food and beverage industry cater to this new breed of consumers.
Conclusion: As the industry itself is positioned for massive growth, Domino’s has enormous growth potential and an untapped market in India. Jubilant Food Works has the master franchise of Domino’s in India, Bangladesh, and Nepal.
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