While many international restaurant brands are already in India, a host of others are lining up to commence operations. But almost every CEO B&E met for this story lamented the over-policing by the government... We take a quantitative stock analysis! by Vareen Gadhoke Ray & Swati Sharma
The Economics of Food
Notwithstanding its increased prominence in recent years, the restaurant industry has a history of being fragmented & unorganised, and often suffers the consequence of being compared to the small sweet shops & roadside snack outlets spread across the country. In a market dominated by the unorganised players, the organised segment is estimated to be Rs.70-85 billion [as per "Indian Restaurant Industry 2010", a White Paper prepared by National Restaurant Association of India (NRAI) in association with Technopak Mindscape]. The organised segment of the restaurant industry forms 16-20% of the total restaurant market of Rs.430 billion.
In spite of the slowdown, the restaurant industry in India is still expected to be one of the fastest growing, with a growth of 5% plus until 2011. The organised segment is in fact expected to grow faster than the overall restaurant industry, at 20-25% per annum. And given the faster growth of the organised segment, its share of the pie is expected to increase to 45% (to a size of Rs.280 billion). The reasons for this growth are two fold. First, the growth of current and new organised players, and second some of the unorganised operators becoming organised.
As per a Technopak report, by 2015, the restaurant industry will become Rs.625 billion plus. While this is a fast paced growth, had the Indian restaurant industry occupied a similar share of GDP as the restaurant industry of the US occupies of the US GDP, its value would be Rs.1,800 billion, so the untapped potential is immense. Among the various formats, QSRs & cafes have had the maximum growth over the last few years. While most other countries in the Asia region witnessed single-digit growth, QSRs are expected to grow at 15-20% over the next five years.
The Economics of Food
Notwithstanding its increased prominence in recent years, the restaurant industry has a history of being fragmented & unorganised, and often suffers the consequence of being compared to the small sweet shops & roadside snack outlets spread across the country. In a market dominated by the unorganised players, the organised segment is estimated to be Rs.70-85 billion [as per "Indian Restaurant Industry 2010", a White Paper prepared by National Restaurant Association of India (NRAI) in association with Technopak Mindscape]. The organised segment of the restaurant industry forms 16-20% of the total restaurant market of Rs.430 billion.
In spite of the slowdown, the restaurant industry in India is still expected to be one of the fastest growing, with a growth of 5% plus until 2011. The organised segment is in fact expected to grow faster than the overall restaurant industry, at 20-25% per annum. And given the faster growth of the organised segment, its share of the pie is expected to increase to 45% (to a size of Rs.280 billion). The reasons for this growth are two fold. First, the growth of current and new organised players, and second some of the unorganised operators becoming organised.
As per a Technopak report, by 2015, the restaurant industry will become Rs.625 billion plus. While this is a fast paced growth, had the Indian restaurant industry occupied a similar share of GDP as the restaurant industry of the US occupies of the US GDP, its value would be Rs.1,800 billion, so the untapped potential is immense. Among the various formats, QSRs & cafes have had the maximum growth over the last few years. While most other countries in the Asia region witnessed single-digit growth, QSRs are expected to grow at 15-20% over the next five years.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
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Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face
IIPM – FLP (Flexi Learning Program)