Burger King is Arriving in India this Fall
American fast-food giant Burger King will open its first few outlets in the country by year-end as it aims to make India, along with China, its biggest market in Asia-Pacific, joining a rush of Western fast-food companies already in the market. The outlets will first come up in Mumbai and Delhi.
Burger King has formed a joint venture with the Everstone Group, an Indian-owned, Singapore-based private equity and real estate group, and together the partners will develop a strategy for rolling out the restaurants across India.
“My sense is that to build a solid and profitable business as a Burger King franchise in India over the next seven to ten years will require somewhere between $80m to $100m of capital commitment,” says Sameer Sain, managing partner at Everstone Capital.
“Coming at a time when rivals like McDonald’s, Domino’s Pizza and Yum! Brands have established a long lead here, Burger King will look to penetrate the untapped smaller towns to gain a toehold in the market”, said a senior executive from the Miami-based chain.
Operating in India does pose major challenges for Western restaurant companies, as they try to cater to Indians’ spice-loving palettes, and the high demand for diverse vegetarian options. Successful companies like Domino’s have worked hard to develop special menu items – heavy on the chilli peppers – to woo Indian customers, who rejected the chains initial global offerings as too bland.
This is going to be no piece of cake due to the stiff market competition and volatile consumer markets in India. However, one strong advantage entering India through Everstone is that the company is one of the largest developers of shopping malls and industrial warehouses in India, which should help Burger King beat rivals in securing choice locations. This may be bad news for its competitors like McDonald’s, KFC and Dominoes.