INTERVIEW: Burger King in India isn’t competing with just Domino's or McDonald’s, the roadside chola bhatura vendor is a peer too
- The much-awaited initial public offering (IPO) from Burger King, one of the youngest quick-service restaurants (QSR) in India, is underway.
- This is one of the youngest chains in India, compared to the likes of McDonald’s, KFC or Domino’s, looking to raise ₹810 crore from the IPO. .
- According to the ICICI Direct report, Burger King grew at a faster pace in the last five years as peer McDonald's franchise in North India got disrupted after a legal dispute with one of its main franchisees — Connaught Plaza Restaurants (CPRL).
- The American fast food brand’s menu is quite different in India. “Crunchy, spicy and juicy,” a top exec described it, highlighting the efforts to cater to the Indian taste buds.
- TRIVIA: Interestingly, in Indonesia, both Burger King and its competitor Domino’s is owned by Everstone Group.
- Check out the latest news and updates on Business Insider.
AdvertisementAs Burger King India’s initial public offering (IPO) is hot off the oven and the company’s Head of Corporate Strategy, Prashant Desai, got candid in an exclusive interview with Business Insider. “Whether it goes to street-side vendors’ knowledge to the ODP restaurants to chola bhatura guys — all of them are competition for us,” Desai said.
The reason is pretty evident. Organised quick-service brands are just about half of India’s fast-food industry..
Backed by the global consulting firm, Everstone Group, it is one of the youngest and the fastest growing international quick-service restaurant’s (QSR) ₹810 crore ($109 million) IPO has garnered strong attention from investors.
As per the latest update, the IPO has been subscribed over 3.49 times receiving strong demand from retail investors, within two hours opening on day one.
*as of 11:30 am, December 2
|Investors||Retail Investors||Qualified institutional buyer||High Networth Individuals|
|Subscription||4.67 times||0||0.05 times|
TRIVIA: Interestingly, in Indonesia, both Burger King and its competitor Domino’s is owned by Everstone Group
“We know the strategy.”
This is one of the youngest chains in India, compared to the likes of McDonald’s, KFC or Domino’s. However, according to broking ICICI Direct, Burger King grew at a faster pace in the last five years as peer McDonald's franchise in North India got disrupted after a legal dispute with one of its main franchisees — Connaught Plaza Restaurants (CPRL).
Angel Broking, another brokerage, said that the Burger King IPO has been priced at a significant discount compared to Jubilant Foodworks (which operates pizza chain Domino’s and Dunkin Donuts), and hence, “attractive”.
Having missed at least half a decade of the early boom in Indian QSR industry may have cost Burger King a bit more on real estate but, according to CEO Rajeev Varman, there have been other advantages too. “We have access to knowledge of all things that are done — whether that was done right or done wrong by others. We have a complete supply industry that was in operation for almost two decades. We have access to a cold storage business that has grown significantly in this country for the last few years. All these things if you take into consideration, there’s a benefit of coming late,” he said.
Despite being the American food giant, the company, under its master franchise agreement, the company can curate its menu as per the taste and preferences of Indian customers.
“Our business model, our entire menu, has been created for the Indian people. We went through the most intensive test in the QSR space, so all our products are either crunchy, spicy or juicy. We also have an intensive vegetarian menu. In India, the menu was built keeping the vegetarians in mind,” Desai said.
SEE ALSO: Burger King India IPO opens today — brokerages recommend ‘subscribe’ on attractive valuations
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