Volkswagen’s 1Bn Euros Investment in the Rapidly Growing Indian Automobile Sector

The Indian Automotive sector is on a drive to changing the automobile industry landscape. Being the fourth largest country in the Automobile sector, India is expected to be valued between $251.4 Billion and $282.2 Billion by the year 2026. With the growing dominance of the use of automobiles in the country, the interest of foreign companies in investing in the country for the sector is increasing in parallel.

According to data, the automobile production in India increased by 16.69% year-on-year to reach 10.88 Million vehicle units, during the months of April-July 2018. The Compound Annual Growth Rate (CAGR) in the country, between FY13-18, increased by 7.01% with 24.97 million vehicles being sold in FY18. BMW and Mercedes-Benz, the leading luxury car manufacturers recorded their best-ever half-yearly sales in India during January-June 2018.

The Indian government has set up National Automotive Testing and R&D Infrastructure Project (NATRiP) centers as well as the National Automotive Board to act as a facilitator between the government and the industry. Since the year 2015, five testing and research centers have been established in the country under NATRiP. The Government aims to develop India as a global manufacturing and Research & Development hub. These initiatives by the Government and the major Automobile players in the market are expected to make India a leader in the two-wheeler and four-wheeler market by the year 2020.

With the increasing global concern in the country, the Government has shifted its focus on electric cars in order to meet the Emission Reduction targets. To achieve the ambitious target of having only electric vehicles sold in the country, the Indian auto industry is expected to see 8-12% increase in its hiring during FY19. In the fillip to India’s mission of only Electric vehicles by 2030, the Ministry of Heavy Industries, under the FAME (Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles in India) scheme shortlisted 11 cities namely Delhi, Mumbai, Ahmedabad, Bengaluru, Jaipur, Lucknow, Hyderabad, Indore, Kolkata, Jammu and Guwahati for the introduction of these vehicles.

In order to cope up with the growing demand of the Indian automobile market, various international car manufacturing companies such as BMW, Audi, Toyota, Skoda, Volkswagen, and Mercedes Benz are willing to join hands with India entry consulting firms as their strategic partners in order to expand their horizon in the Automobile manufacturing sector. These companies have started providing finance to their customers in India through Non-Banking Financial Companies (NBFCs). India offers a comparative cost advantage of roughly 10-25 percent in comparison to that in Europe and Latin America; which acts as the major attraction force for foreign automobile companies to invest in the rapidly growing sector. The presence of large automotive clusters in the country: Delhi-Gurgaon-Faridabad in the north, Mumbai-Pune-Nashik-Aurangabad in the west, Chennai- Bengaluru-Hosur in the south and Jamshedpur-Kolkata in the east also prove the need of the hour.

Considering the growth rate in the Indian market, Global car manufacturers have been escalating their investments in the country, with the plan to leverage India’s competitive advantage in setting up export-oriented production hubs. With the help of Indian business consulting firms, a growth of 26.56% had been observed in the Indian automobile exports during April-July 2018. The growth is further expected to reach a CAGR of 3.05% during 2016-2026. The Indian Automobile industry received Foreign Direct Investments (FDI) worth $19.29 Billion between the months of April 2000 and June 2018.

The German Automobile Manufacturing company has declared its investment worth 1 Billion Euros in the Indian Automobile industry between the years 2019 and 2021. This has been done as a part of its latest strategy, led by the Skoda group in order to enhance its presence in the country and avail business opportunities in India. An Engineering Design and Development will be set up in Pune besides its enhancing capabilities at the group’s two plants at Aurangabad and Pune. One of the world’s largest automobile companies is pointing at a significant 5% share in the Indian passenger market through its sister brand, Skoda Auto. With the motive of giving the best customer support services at competitive prices, Volkswagen has entered the Indian Automobile industry planning to launch one new product every year, from the year 2021 to 2025.



9 Undeniable Reasons That Spearhead Organized Retail Growth in India

Organized retailing is a latest and ongoing advancement. It refers to the trading activities of licensed retailers who are registered for income tax, sales tax etc. These include retail chains and hypermarkets backed by corporates and privately owned retail businesses. With socio­economic factors playing out a crucial role in the buildup to organized retailing, India is currently standing on the threshold of a retail revolution.

The Retail Industry is one of the rapidly evolving industries that is replete with vibrancy and dynamism. It has significantly reinforced the economic growth and development of our country in a very short span of time.

Varying demographic patterns, improving economic prosperity, increasing disposable incomes, proliferating Indian manufacturing firms and changing consumer likes and preferences are key to driving success in the domain of Indian organized retail sector.

Here are 9 top factors at the helm of the rise of organized retailing.

1. Ascent of consumerism

With the stupendous rise in consumerism, the retailer is challenged with a more intelligent and demanding consumer. As a business exists with the prime objective to placate consumer needs and preferences, the amplifying consumer expectation has compelled the retail companies to change the business model of their retail trade. Consumer demand, comfort, convenience, time and location are the critical decision makers for the evolution and expansion of organized retailing in India.

2. Rise in the number of middle-class consumers

The recent years have observed a rapid growth in the number of middle-class consumers. The burgeoning demands, better disposable income among the consumers and improvements in infrastructure have offered the retail industry an elbow room to develop and flourish.

The consumers expect the finest quality products at affordable prices. Offering a broad variety of goods and value-added services to the consumers is what modern retailers strategize on.

The development of consumerism that has predominantly enlarged the consumer markets and accelerated the confluence of consumer tastes would be a vital success driver for Indian organized retail.

3. Increase in the number of working women

The modern Indian women are literate, knowledgeable and qualified. They keep up an excellent balance between their home and work. The buying propensity of working women is out-and-out different from the homemakers. Because of their time constraint for leisure and relaxation, they insist on engaging in a seamless one-stop shopping experience to satiate their needs and the whole shebang under one roof which the ultra-modern retail outlets offer.

4. More value for money

Numerous dealers and distributors in India from the organized retail sector are able to appreciate the economies of production and distribution in large scale. They lean on eliminating intermediaries in their distribution channel. In addition, organized retailers provide decent quality products at acceptable prices. The tempting open door for ample profit is increasingly attracting entrepreneurs to enter into this breeding sector by setting up retail companies in India.

5. Emergence of the rural market

In the present times, the rural market in India is confronting fierce competition in the retail sector as well. The rural consumers have also become extremely quality conscious. To capitalize on this development organized retailers are creating new strategies to fulfill and deliver the needs of the rural customers. After agriculture, it’s the retail industry that is growing a deep penetration into rural India and proving to be the country’s next big source of employment.

6. Entry of the corporate sector

Eminent business moguls like Tata, Birla, Reliance etc. have entered and taken the retail sector by storm. They provide products and entertainment with quality par excellence. Other prominent corporates like ITC, Piramal, RPG Enterprises and retail heavyweights like Shopper’s Stop, Pantaloons and Crosswords have completely revolutionized the Indian retail landscape.

7. Ingress of foreign retailers

The Indian retail sector has caught the attention of even foreign retailers like never before. Because of considerable liberalization, many well-known multinationals are poised to make successful inroads through moneymaking joint ventures and franchising thereby majorly boosting organized retailing.

Case in point is the world-renowned furniture retail giant Ikea that has recently opened its colossal 400000-square-foot retail store in Hyderabad. Ikea is “get up and go” to fulfill its ambitions in expanding their footfall in other metros like Delhi, Mumbai, and Bangalore in the next couple of years. The company has plans to set up around 25 stores by 2025.

8. Technological impact

Technological innovation is a dynamic aspect that has propelled organized retailing to greater heights. With the influx of digital information system, internet, explosion in electronic and social media, satellite television, digital marketing and popular unique technologies like big data, artificial intelligence, bar coding, Blockchain etc. have not only increased consumer awareness about products and services but also enabled retailers to sell online products in a transparent and profitable manner.

9. Upsurge in average income

The rise in literacy level has come about in an increase in the average income of the general populace. This growth is observed not just in cities, but in towns and rural areas as well. Increase in income levels, heightened spending habits and enhanced literacy rate among consumers have led to the genesis of a new retail structure to meet the ever-growing demands for improved quality goods and services.

Why Global Economic Experts are giving Thumbs Up to Healthcare Sector in India? (Trending towards US$ 372 billion Mark by 2022)

Indian Healthcare sector seems to be in mode of steady and prolific growth. Down the line, the forecast seems promising. Expectation is sky-high with dreams of total industry size touching US$ 372 billion by 2022. This sector should definitely record a Compound Annual Growth Rate (CAGR) of 16.28% in the time frame of 14 years (2008 to 2022 to be more specific). The business revenue earned from this sector stood at handsome figures of Rupees 4 trillion (US$ 61.79 billion) in the year 2017. If it maintains the stated CAGR, a whopping 8.6 trillion (US$ 132.84 billion) would not be a dream that’s far away. (i)

Statistics reveal that forecast proved true in the past years and is expected to continue the same curve. In 2017 the expectation was US$ 160, which now is an established figure in the business world. From 2008 till the close of year 2017, India has been witnessing steady rise; the business milestones of each year seem to have excelled he growth of the previous year. (i)

Why Global Economic Experts are giving Thumbs Up to Healthcare Sector in India?

The top reasons for bright and healthy scenario of healthcare in India are:

  • One of the largest revenue earners in Indian business sector
  • Creating Mammoth Employment Opportunities – by 2030 it is expected that the sector will be providing 40 million jobs in the country. (i)
  • Wise and prudent business strategies are facilitating mergers and acquisitions with domestic and global companies in order to acquire newer marketing horizons and generate growth.

Top Healthcare Consulting Firms Provide Integrated, Value-added Care

India healthcare consulting firms are working in tandem with doctors who are the backbone of healthcare industry. The mission is to ensure that the doctors remain free from hassles of and nitty-gritty of medical delivery in India, so that they can devote time and work on their expertise to cure patients.

Pharmaceutical companies are coming up in large numbers because of the increased healthcare opportunities and areas of collaboration with healthcare experts. With the rise in the numbers, pharmaceutical consulting has acquired a whole new dimension. They are providing world-class infrastructural facilities for healthcare clinics both in the urban and the rural circuit. Apart from infrastructural planning they can provide world-class services in the areas like –

  • Hospital consulting, licensing and operations services
  • Medical equipment listing and procurement budgeting
  • Managing doctor recruitment and HR services
  • Healthcare commissioning and management services
  • Fund raising after fund requirement analysis
  • Market research and repositioning
  • Event management services
  • Legal issues handling services

More Reasons for Healthcare Revenue and Industry Size Growth

The growth of medical tourism in India is proving a fertile ground for growth of business consulting services in India in pharmacy sector. It has been a record number of years that India has been the frontrunner as the ideal medical hub in the continent of Asia. The consultants and experts of the healthcare industry work on every detailed aspect to boost efficiency and productivity of hospitals, doctor- run clinics, nursing homes, and primary healthcare centers or organizations up to the grass-root level.

Even telemedicine, which is a relatively new concept in the world of healthcare, is reason behind the amazing growth graph of the healthcare industry in India. It refers to real-time, lightning speed, interactive communication between healthcare professionals and patients far across by using telecommunications technology. It is counted among the boons of Information Technology.

Establishment of world-class healthcare facilities in every nook and corner of the country is presenting a promising picture; acting as a magnet to pull both global and domestic healthcare seekers. The increased number of patients means that more and more doctors are needed to provide health care. The need to leverage medical efficiency through top-class hospitals and best of doctors seem to pose an uphill task for the Government. Here comes the need of the consultants and their top solutions in pharmaceutical consulting.

The perspective of healthcare is 360 degree management. Needless to say, that requires efficient doctors, managers, administrators, finance analysts and business heads along with top-class governmental initiatives for countless patients within and beyond Indian borders. In recent years India Government has approved of 100% FDI or Foreign Direct Investment in technologically advanced medical devices. Hence foreign investors are giving a boost to the revenue by their prolific investment; government reports have pinned this figure to US$ 4.99 billion in between the 200-2017 time frame. To top it all, people have become more aware of the lifestyle health issues and chronic diseases. It is the combined effect of all the above factors that substantiate the growth in the healthcare sector of India.


Indian Car Export to the US Success Story You’ll Never Believe

The sale of Indian-made cars has reached new heights in the United States as the automotive market experiences a steady escalating growth. In FY18, US happened to be the third-largest export market for Indian cars. (i)

However, as per recent figures, for the first quarter of FY19, the United States has raced ahead to become the second-biggest export destination for cars manufactured in India. South Africa is ranked at the third slot where Mexico still maintains the top position.

Latest reports on exports from the Ministry of Commerce revealed that the US is deemed to hold a 15% of the market share of the total export of India made passenger vehicles (including sub-segments of cars, utility vehicles and vans) worth $268 million in April to June period.

Although South Africa netted a total $666 million in FY18 and was holding the 2nd position, in FY19, for the same period, shipments to the country went drastically down to $199 million. Mexico grossed an overall export worth $407 million in the April-June quarter and retained the top spot as India’s greatest export destination for indigenous cars.

For the US, the export value has unbelievably spiralled up manifolds from a measly $3.52 million in the FY17 to a staggering $654 million in the FY18. For the whole of FY18, India exported shipments valued at $666 million and $654 million to South Africa and the US respectively. Automotive consulting firms in India forecast FY19 to become a milestone chapter in the history of Indian car exports to the US.(ii)

Thanks to the dispiriting slowdown in other foreign countries, the US, which was a complete non-entity in the export business for Indian car manufacturers till FY17 have now assumed the rank of second-biggest export destination.

According to industry experts from leading Market Research Companies in India, the downbeat impact of Brexit and rising prices of commodities severely hit the most populous export markets like the UK and Europe. They further added that carmakers were increasingly looking forward to having one or a couple of countries as a functional and cost-competitive manufacturing nerve centre for producing preferred models.

The findings also show that in FY17, the UK which ranked second in the market after Mexico had its exports fall by nearly half to a figure of $220 million in FY18. Meanwhile, exports to Italy dropped by 25% to $263 million and to Spain by 30% to $137 million.

Only exports to Mexico rose by almost 8% to reach an astounding record worth $1.69 billion. However, the noticeable surge in the exports to the US accounted for an overall remarkable growth for FY18.(iii)

This rapid growth in the US exports piggybacks on a single carmaker Ford with their one product EcoSport. The company commenced exporting the compact SUV from its Chennai based manufacturing plant, aggressively to the US in FY18.

Ford India which is an auxiliary establishment of the American automotive giant Ford Motor Company is fiercely competitive in exploiting its Indian competence to expand export business opportunities to sundry world-wide markets, including the US.

The company recognizes the US as one of its key markets because the company, in contrast to its domestic sales amasses more volume from exports. Last year, Ford raced past Korean carmaker Hyundai to turn into the largest exporter of passenger cars from India.

In the April-June quarter of FY19, Ford India exported around 35,000 units to diverse marketplaces, including the US. Approximately, 20,500 cars of the total number are Ford EcoSports. Although Ford India does not disclose the data of exports destination-wise, it is estimated that Ford exported roughly 90,500 EcoSport cars to several markets in FY18.(i)

For Ford India, the momentum of exports to the US appears to be significantly more grounded in the present financial year. If we flow on with the pecking order in April 2019, the US has already positioned itself as the second-greatest market with export consignments worth $98 million.(i)

From FY17, the two American automotive behemoths, Ford and General Motors began exporting passenger vehicles to the US on a large scale. General Motors has all the way shut down their India sales. They currently use their complete production capacity for export purpose, especially to the US. Ford EcoSport and Chevrolet Beat are reported to be the cars that garner the maximum export share.

The US keeps on being the biggest auto market in the world and Indian exports are just touching skin deep. Being a market with a broader perimeter joint ventures companies in India especially Maruti Suzuki and others like Hyundai and Volkswagen have initiated their exports progressively to the US from India, which in turn has developed into a voluminous automotive manufacturing hub that exports to almost 175 countries.




How to Gain Entry and Win the Indian Market with These 6 Planning Tips

In the present times, Indian markets and business sectors are insatiable and sales are on a booming spree. The ever-developing middle class in India are pushing the interest and stipulations for enhanced quality and increased choices in a vast majority of markets starting from infrastructure, water quality to electronics and air travel. The sky-rocketing demands for the international products make them more appealing across a large segment of the market.

However, for successfully selling foreign products in India, there is an imperative necessity to choose a clear-cut market-entry strategy for India as well as a comprehensive business plan.

Therefore, your choice is contingent on a number of key factors that broadly embrace an in-depth planning and analysis like knowing your customers, your products and their mutual acquaintance level, along with a great deal of patience and commitment in terms of how much energy, time and money you can plough in for establishing your sales and succeed in India.

Making a wrong decision can lead to a loss-making venture or your fiscal estimate can go awry.

But what are the golden rules for the most appropriate and favourable market entry for India? Begin with an intensive market analysis!

A rigorous and up-to-the-minute market research is a foremost and compulsory prerequisite. This decides how winsome the Indian market is for your products and services. It also pinpoints the emerging opportunities and threats. An overarching market-entry strategy should incorporate the following pivotal subjects of interest.

  • Evaluation of current market size
  • Estimation of future market size
  • Long-term and short-term budget planning
  • Market growth rate
  • Latest and futuristic market trends
  • Market profitability factors
  • Distribution channel framework
  • Industry cost structure
  • Key success drivers
  • Local competitor analysis and review

So what does a decent marketable strategy look like? The responses to a considerable measure of enquiries. Here you have the 6 most vital ones.

1. Right partner planning

India with a current populace of 1.3 billion people is the world’s seventh biggest economy in terms of GDP growth rate. The complexity and the progression in the Indian market often become a taxing proposition for both indigenous and foreign companies alike.

Businesses with a pre-conceived mindset and a paltry exposure to international markets might discover that the trade and commerce culture in India is very intimidating.

Being a new entrant into the Indian market, if you can identify your right partner, you can successfully navigate these complexities of the unseasoned regional business environment. A local accomplice can truly provide you with the much-needed help to comprehend the market sketch.

The partner can impart valuable information pertaining to regulation, competition and many more. They can also get you acquainted with the network to outreach your target prospective clients with a minimal on-the-ground investment.

2. Distribution planning

What is the modus operandi you would follow to sell and distribute your products and services in India? Currently, India has 29 “states” and another 7 “union territories”. This indicates that you would possibly require local wholesalers for the distribution to a humungous number of diverse sized neighbourhood dealers and retailers.

Find out if your products are flexible and resilient enough to put up with the challenging logistics conditions prevalent in India. Assess the preconditions to seek the support of external parties or you own India entry consulting agents. Do you require a distributor who in-turn pitches to retailers or do you have the tenacity and gumption to offer your products directly to the retailers?

Know how the end-users access your products. What sort of help do these wholesalers or retailers need? Basically, you need to acquire a thorough understanding and insight into the Supply Chain Management landscape of India.

3. Personnel planning

In what manner will you motivate your distributors? Galvanizing and boosting the morale of business owners and employees of autonomous distributors call for great levels of effort. While ascertaining your market price for India, remember that customary obligations like taxes, duties etc. vary across the different regions.

4. Sales strategy planning

Meticulous planning of sales strategies and related activities involves techniques to effectively reach your clients, carefully gauge the competitive edge and disparities, efficiently utilize available resources, prudently chalk out long-term goals for sales and distribution and precisely determine the headcount of sales personnel for every identified location.

At the same time, clearly, vocalize the tactics for your daily selling operations. These include identifying and mapping prospects, defining the sales processes and follow-ups. In order to win over a competitive advantage, you have to essentially cogitate over the two sides of the equation namely tactics and strategy.

5. Product modification planning

The Indian market is immensely dynamic in nature. You have to be prepared for potential product modifications and refitting to meet the burgeoning needs. You need to accomplish this by keeping a watchful eye on your pricing strategies and final product price.

It may be advantageous to build your own manufacturing units in India so that you can adapt placidly to these price fluctuations. When it comes to delineating the Market Entry Strategies in India, you can largely encounter the same questions as in other markets, but their answers look for an innovative and unique approach, besides having a profound knowledge of the overall market scenario.

6. Legal and regulatory planning

The Indian legal framework takes after a “common law”, and the Indian constitution has accommodated a solitary integrated assemblage of courts for administering both the union and state laws. You should pay proper attention before signing off a formal agreement.

Decrees and arbitrations by courts are frequently postponed in India on account of a huge backlog of cases. Hence, any worthwhile agreement should be capacitated with the scope or provision for backup conflict resolution mechanisms.

Tecnova advises Bibus AG on buyout of JV Partner’s equity in Indian Joint Venture Company

Tecnova India Pvt. Ltd. advised Bibus AG (Bibus) on buying out its Indian partner’s 50% equity in Bibus Horizon Mechatronics & Automations Pvt. Ltd. The JV, incorporated in 2012, was set up in Bangalore as a trade and assembly unit to cater to Indian customers.

Bibus will be now operating in India as a 100% owned subsidiary of Bibus AG, Switzerland. The transaction was closed in Bangalore on the 4th of May 2018.

The Mergers & Acquisitions team of Tecnova advised Bibus AG in all negotiations between the parties and was the official investment banker in the deal. The Team was led by Mr. Karan Singal, CEO of Tecnova.

Tecnova advises Fras-Le S.A. on strategic partnership with ASK Automotive Pvt. Ltd.

Tecnova India Pvt. Ltd. advised Fras-Le S.A. (Fras-Le) on a Strategic Partnership with ASK Automotive Pvt. Ltd. The principal purpose of the Joint Venture will be to manufacture Brake Pads and Brake Linings for the Commercial Vehicle Segment in India, Bangladesh, Sri Lanka and Nepal and also for exports to other countries through Fras-Le’s global network.

Fras-Le will be partnering with ASK Automotive to establish a new company called ASK Fras-Le Friction Pvt Ltd, and will collectively be investing over INR 100 crore in the JV over the next 3 years.

The Mergers & Acquisitions team of Tecnova advised Fras-Le in transaction structuring and negotiation between the parties and was the official investment banker in the deal. The Team was led by Mr. Karan Singal, CEO at Tecnova.

Fras-Le will own 51% in the joint venture company. The deal with ASK was signed at Fras-Le’s global headquarters in Caxias do Sul, Brazil on the 5th of December, 2017.

Tecnova India Pvt. Ltd. advises Intertape Polymer Group on strategic partnership with Capstone Polyweave

Tecnova India Pvt. Ltd. advised Intertape Polymer Group Inc. (IPG) on a Strategic Partnership with Capstone Polyweave Private Limited (Capstone). The principal purpose of the partnership will be to provide IPG with a globally-competitive supply of woven products.

IPG will be partnering with the current shareholders of Capstone, who are also the shareholders of Airtrax. Airtrax manufactures and sells woven products that are used in various applications, including in the building and construction industry.

The Mergers & Acquisitions team of Tecnova advised IPG in this multi-stage transaction. The team was involved in transaction structuring, negotiation between the parties and was the official investment banker in the deal. The Team was led by Mr. Karan Singal, CEO and Head of Mergers & Acquisitions at Tecnova.

IPG will acquire a 55% interest in Capstone for a cash consideration of approximately USD 13 million.

The deal is valued at approximately USD 25 million and was signed on June 14, 2017.

Investments from China into India grow Six fold

Low investment restrictions and favorable tax and land rent policies has prompted many Chinese businesses to head over to India in search of profits, growth and opportunities. This has led to growth in Chinese investments in India by over six-fold in 2015 to USD 870 mn. Add to this the saturation of Chinese economy, which has got the Chinese businesses to invest overseas, in which aspect India is a clear winner.

Chinese businesses have committed to make huge investments in different sectors of Indian economy under the Indian Government’s Make in India and Digital India initiative. China’s property giant Dalian Wanda Group has announced that it will invest USD 10 billion in building an industrial park in northern India. Construction machinery manufacturer Sany Heavy Industry has also revealed to invest USD 1 billion in India over next 10 years. Other big Chinese business groups like Shanghai Automotive Company, Chint group (proposed to invest USD 1.5 bn in India), Sopo Group, Dingshen, Shanghai Electric company plans to make substantial investments in India [i].

The states of Gujarat, Andhra Pradesh, Tamil Nadu and Maharashtra which can provide better infrastructure are being seen as hot spots by these companies to set up their Indian operations.

It won’t be long when companies from other parts of the world realize the true potential that India holds, as is visible from these investments from China into India.

The Indian President was also quoted as saying that India would grow at the rate of 7.5 percent over the next decade and India is too far away from any kind of economic saturation. One can also put in the fact that India emerged as one of the biggest global investment destination in 2015 and the fastest growing Emerging Economy.

To know more about investment opportunities in India, connect with our consultants at


International fast food joints expand in India

Various companies including international and domestic players are now making an entry into quick service restaurants – QSR – space. This has given rise to widening of the market due to increasing disposable income of the middle class, rapid urbanisation in the country and influence of western food among the young audience. As per Assocham [i], QSR sector in the country has been growing at a CAGR of 25 per cent and might touch a figure of USD 3.7 billion by the year 2020 from the current USD 1.3 billion.

Other reasons for expansion of the QSR space was because of higher growth seen in the nuclear family system, growing knowledge of international brands by Indian audience, availability of better logistics and availability of products on the Internet.

As per Assocham’s report, around 50 per cent of the population in India – mostly in the urban and semi-urban areas – eats out at least once in every three months. Of this, in the metros, people eat more than eight times from outside in comparison to the US – it is 14 times, in Brazil – it is 11 times, in Thailand – it is 10 times and in China – it is 9 times.

It is believed that with rising income, Indians might be looking at spending more and the competition in the space might get fiercer over a period of time. Foreign chains like Wendy’s, Burger King, Johnny Rockets and Carl’s Jr. are making it big in the country.

In terms of cities, larger part of QSR market come from the metros as well as mini metros because of high consumption, consumer awareness as most people tend to travel abroad.

With this, QSRs are able to grab their market share in the major cities and are now looking at expanding into smaller cities in various formats.

QSR format was able to take off in India 19 years ago with McDonald’s in the year 1996. Many other brands followed their footsteps, either by having company-owned stores or through the franchisee model, and in some cases, mixture of both.

‘App’ing the business

With increased use of smartphone apps, it now allowing Indians in mostly larger cities to order for wide array of food. Delivery and online food-ordering in India as a sub-sector is growing with players such as Faasos, TinyOwl, and FoodPanda expanding rapidly into the segment.

Players such as Food Panda as well as Zomato, even Grofers, are growing their overall food services as a part of their long term vision as per Citi note [ii]. By operating in more than 200 cities in India, Foodpanda has more than 10 lakh user base for its app alone. It is believed that more than 50 per cent of its users order food from app [iii].

Food companies expanding footprints in India:

• Dunkin’ Donuts – the US doughnut chain – is now looking at foraying into packaged products for increasing its sales in India. It has tied up with Grofers for delivering packaged and fresh products.

• Kellogg’s – cereal maker – would be setting up its first research and development centre in the country by the end of this year.

• FAL Food and Beverages – from Australia, manufacturer of Juiced Up, Coco Joy and Aqua Hero beverages – would be setting up its first factory in the next three years.

• After the US, India is Domino’s Pizza’s second-largest market, according to Jubilant FoodWorks. The company might be looking to add nearly 5,000 employees by the end of the fiscal March 2016. It is already 30,000-people organisation, and is looking at investing around USD 29 million for expanding in India.

• Britannia Industries is now planning to become a total food company. It is aiming at becoming an USD 2.99 billion turnover company in the next six years. According to the company’s strategy, it would be finalising – in the six months – the plans to expanding their dairy segment and also expanding into value-added segment as well.

• Swiggy – food ordering application – has collaborated with Burger King for providing seamless ordering experience to the clients [iv].

Fast forward

The QSR industry has been growing rapidly with the focus mainly being at providing affordable as well as competitive pricing. It is also looking at providing variants to meet the growing consumer needs and satisfying the craving for international food amongst the Indian audience.

India has 1.2 billion in terms of population, but the country has only over 2,700 fast food outlets, thus, most of the people are left untouched, as per Euromonitor International [v].

With young crowd entering into the workforce on a daily basis, robust growing economy, rise in female workforce, and increased mobility, Indians are now becoming more demanding for diverse menu. QSR business has been able to make a remarkable growth with Indian consumers now spending more money on weekends and holidays, eating outside with friends and families.

QSR market is still at a very nascent stage and there is ample space for many brands to enter into the market and earn rapidly.

Planning to enter into the fast-growing QSR market? Connect with our consultants at