 "Jubilant Foodworks")
The entry of India's largest food service operator Jubilant FoodWorks into Chinese cuisine may goad rival brands to follow suit. After Punjabi cuisine, Chinese is the second-largest consumed food in India, estimated at around 20 per cent of the Rs 3.7-trillion domestic food service market. The punjabi cuisine contributes around 30 per cent to the overall market, while South Indian cuisine comes third at around 10 per cent, sector experts said.
Jubilant is expected to deploy the same tactics that it used in pizzas earlier, said Kaustubh Pawaskar, senior research analyst at brokerage Sharekhan. "The company was quick in tapping the potential in the pizza category, launching stores, coming up with exciting offers, pushing delivery sales etc. The strategy will be similar in Chinese cuisine too, where the accent will be to deliver good food at a reasonable price," he said.
While Jubilant has begun with one Chinese outlet in Gurugram, it is likely to launch more stores in the Delhi-NCR region, before taking the format (called Hong's Kitchen) to other cities, persons in the know said. The size of the outlets is likely to be between 1400-1500 sq ft, making it convenient to take the retail format to many more markets, industry sources said.
In a statement last week, Jubilant FoodWorks' CEO Pratik Pota said that Hong's Kitchen would tap the mid-market segment which sat between unorganised food joints serving Chinese food and premium fine-dining restaurants specialising in Chinese cuisine. "With its fast casual format, Hong's Kitchen will address this vast unaddressed market with great-tasting and affordably priced Chinese food," he said.
The move to get into Chinese cuisine also comes as Jubilant scales down store additions in Dunkin, its second global fast-food brand (after Domino’s Pizza), which was launched a few years ago in India. Jubilant is the master franchisee of Dunkin and Domino’s Pizza in India.
For the three months ended December 2018, the company achieved break-even in the Dunkin business, ahead of the fourth quarter deadline it had set earlier, and is expected to keep Dunkin stores at around 32, sector experts said.
It is unclear whether some of these Dunkin stores would be converted into Hong’s Kitchen outlets in the future to capitalise on the growth in the Chinese food market. In a recent analysis of the Gurugram outlet of Hong's Kitchen, Abneesh Roy, senior vice president, research (institutional equities), Edelweiss, said the food was priced between Rs 99 and Rs 350 for noodles, rice, combo packs, momos and spring rolls, items that are expected to move quickly in terms of orders. Customers also have the option of either going for delivery or dine-in at the store, he said, with an app available for online food ordering and a hotline for phone ordering.
"We believe this (Hong’s Kitchen) will be potentially a strong alternative to large organised brands such as Mainland China, Yo! China, 5 Spice as well as small-format Chinese fast food startups such as Wok Express, Swiggy’s The Bowl Company, Faasos (Mandarin Oak) and several others that have cropped up in the country in recent years,” Roy said.
Jubilant may also look at setting up stores of Hong’s Kitchen in the vicinity of existing Domino’s outlets to take advantage of a common back-end, sector experts said. “If Jubilant decides to scale up this format, it could leverage its existing scale in sourcing, commissaries for dry storage, real estate and technology over time,” Latika Chopra, analyst at brokerage JP Morgan, said in a note.
