Papa John’s International, a leading American pizza chain, has announced its intentions to re-establish its presence in India by October. The company has set an ambitious goal of opening 650 outlets across the nation within the next 10 years, despite the challenging landscape in which fast-food businesses find it difficult to maintain sustained sales growth.
Papa John’s, ranking third worldwide in terms of pizza delivery, withdrew from the Indian market in 2017 due to unsatisfactory performance. However, this move parallels that of its American competitor, Little Caesars. The latter made its debut in India earlier in the year, with a plan to inaugurate approximately 100 establishments by the end of the decade.
Re-entering the Indian Market
The first Papa John’s outlet in the country is set to open in the southern city of Bengaluru, according to Vish Narain, managing partner at Pulsar Capital. This Indian investment firm, in association with the UAE-based PJP Investments Group, will serve as the joint master franchisees of Papa John’s in India.
The pizza giant announced its plans to return to this intricate market back in April 2023. This decision comes at a time when fast-food chains are dealing with declining sales in India. Urban consumers, who form the primary customer demographic, are scaling back on expenditures due to sluggish wage growth and the burden of rising competition.
Devyani International, one of the two Pizza Hut franchisees in India, is responding to this trend by shutting down underperforming outlets. Simultaneously, Sapphire Foods India, a smaller operator, is exercising caution with their expansion strategies.
The Competitive Landscape
The hurdle of competition is not one to be taken lightly. Papa John’s will have to contend with Domino’s Pizza, which boasts over 2,200 Indian outlets, Pizza Hut with around 950 stores, and upscale chains such as Pizza Bakery and PizzaExpress.
However, Pulsar Capital seems optimistic about India’s long-term potential, mirroring the stance of consumer-facing companies like Hindustan Unilever, the maker of Dove soap, and brewery giant Heineken. Both companies continue to invest in India, banking on its massive population of 1.4 billion.
“The fast-food category is under-penetrated, so we are many years away from saturation,” said Narain.
Papa John’s aims to modify its pizza to cater to local taste preferences while also offering its signature dishes. This strategy aligns with the practices of other fast-food competitors. For instance, KFC offers a paneer zinger burger, Domino’s serves a chicken tikka pie, and Subway has a potato-patty sandwich on its menu.
Questions & Answers
When is Papa John’s planning to re-enter the Indian market?
Papa John’s plans to re-establish its presence in India by October.
Which city will be home to the first new Papa John’s outlet in India?
The first new Papa John’s outlet in India will be opened in the southern city of Bengaluru.
What is the projected number of Papa John’s outlets in India over the next decade?
The company aims to open 650 outlets in India over the next ten years.
