DUNKIN’ Donuts said on Wednesday (May 30) it aimed to open 100 stores in India over the next five years as it goes head-to-head with rival Starbucks, due to open in the emerging market giant later this year.
US-based Dunkin’ Donuts, which set up its first Indian outlet earlier in May, is among a growing number of Western fast-food chains heading to Asia’s third-largest economy to cater to a young, increasingly affluent urban market.
Along with its usual range of products, Dunkin’ Donuts, one of the world’s top baked goods and coffee chains, has created offerings adapted for the Indian palate such as spicy sandwiches, mirroring efforts in China to woo customers.
Getting products to “suit the market is very important to our success”, chief executive Nigel Travis told reporters on the sidelines of another Dunkin’ Donut store opening, its third this month.
Dunkin’ Donuts, whose customers are ranked as the most loyal in the highly competitive US market – ahead of Starbucks – by research firm Brand Keys, entered neighbouring China in 2008.
The world’s leading donut seller now has some 80 Dunkin’ Donut outlets in the world’s second-largest economy.
“We see a young, fast-growing middle class here in India – the country is ready for entry,” Travis said, calling the nation of 1.2 billion a “great growth opportunity”.
Dunkin’ Donuts is betting on emerging markets, whose economies are growing faster than those of developed nations, to help drive revenue growth as “they love American brands”, Travis said.
The six-decade-old company, which caters in the US to a more working-class clientele than the more upscale Starbucks, is eyeing Brazil as the next market it could enter, Travis said.
Dunkin’ Donuts will be competing in India against well-established domestic competitors such as Cafe Coffee Day and Barista, as well as Starbucks, which aims to open in August or September.
Other fast-food US brands McDonald’s, Domino’s and Pizza Hut are already expanding quickly in India, leading to concern among health experts about their potential links to growing obesity rates among India’s middle classes.
Donut and ice-cream seller Dunkin’ Brands, parent of Dunkin’ Donuts, aims to open 550 to 650 new outlets around the world in 2012.
Up to 450 will be outside the US with a “disproportionate number” in the Asia-Pacific region, said Travis.
Dunkin’ Donuts, which operates on a mainly franchise base, has tied up with India’s Jubilant Foodworks to open its venture. Dunkin’ Brands already has nearly 500 Baskin Robbins ice-cream parlours in India.
Dunkin’ Brands, which has sales of over $8bn and staged a successful initial public offer (IPO) last year, “feels good about its US business”, Travis added.
“Quick-service restaurants have done better than full service” in the downturn as customers turned to cheaper food options while “the recession made us all have a sharper focus”.
