Fast-food spending in India doubles, creating new market opportunities

Consumers’ needs for convenience, increased appetite, an insatiable hunger for international food and exposure to global media and cuisine, have caused fast-food spending to double in India.

THE national annual spend on fastfood restaurants in India’s second- and third-tier cities has doubled, thanks to consumers’ needs for convenience, increased appetite, an insatiable hunger for international food, and exposure to global media and cuisine.

The spend has increased from Rs2,500 (US$42.50) to Rs5,200 — a growth of 108% on fast-food restaurants in the past two years, revealed the latest study of the Associated Chambers of Commerce and Industry of India (Assocham).

India’s Quick Service Restaurant (QSR) market has remained largely unaffected by the economic slowdown and touched nearly around 50 billion from 35 billion rupees last year, according to an Assocham recent paper on Indian fast-food market new destination: Tier II & III cities.

The report said the trend is propelled by factors such as the changing economic and demographic profiles of consumers
in India, exposure to international brands and consumers being far more aware of global trends. “Considering a large portion of customers are youth, this remains a key growth driver too,” said DS Rawat, secretary general of Assocham.

With increased competition and cost of operations in the metros and Tier 1 cities, a number of second- and third-tier cities may off er better growth prospects for players across sectors, said Rawat.

The growth in nuclear families, particularly in urban India, exposure to global media and western cuisine and an increasing number of women joining the workforce have had an impact on eating out trends and the popularity of fast food.