Quick service restaurants market in India- statistics & facts
The Quick Service Restaurant (QSR) accounts for the largest share of the Indian restaurant industry. It has undergone a remarkable transformation, evolving from humble street food stalls and local eateries to sleek, tech-savvy outlets.
The unorganized segment has traditionally dominated the market, much like other sectors in the country. However, in recent years, international brands have entered the market, resulting in consistent growth in the organized sector. These brands have leveraged their global expertise and resources to establish a strong presence in India's QSR market.
Despite challenges, the industry is projected to growover the next five years, driven by the rise of independent stores, boutique QSR brands, and technological advancements like innovative point of sales system and digital payment solutions.
Global giants and domestic heroes in the Indian QSR market
Global brands like McDonald’s, KFC, and Domino’s Pizza have 100 percent penetration in metro cities and a sizable presence in other tier-1 cities across the country. They operate using a master franchise model, where brand outlets are designated territorially. For instance, Westlife Foodworld operates all McDonald’s outlets in South and West India. While international players continue to dominate the organized sector, domestic players are making inroads by incorporating regional flavors and targeting price-sensitive consumers, thus, strategically positioning the brand.Expanding from urban centers
Urbanization, higher disposable incomes, increasing store penetration in tier-2 and tier-3 cities, and the rapid expansion of delivery services have significantly fueled the industry's growth. Furthermore, food delivery platforms have widened QSRs’ consumer base. With aggressive store expansions, QSRs have tapped into the potential of smaller cities and towns where competition is not as intense as in tier-1 cities.Navigating challenges
Inflation in food prices has impacted the operating margins of the industry. Maintaining consistent taste and quality across all locations is difficult as brands recover from the pandemic and continue to expand. Subpar wages, lack of statutory benefits, and lack of incentives have also contributed to the decline in operational efficiency and overall profitability. Moreover, cut-throat competition, labor shortage, and escalating real estate costs pose substantial challenges for QSR owners.Despite challenges, the industry is projected to growover the next five years, driven by the rise of independent stores, boutique QSR brands, and technological advancements like innovative point of sales system and digital payment solutions.
