McDonald's Corp and its partners plan to double the number of restaurants they have in India by 2005, even as the world's biggest burger chain closes outlets in the US, Japan and other countries.
McDonald's will add 52 restaurants to the 48 it already operates in the country, said Vikram Bakshi, head of the venture that runs McDonald's outlets in northern India, including New Delhi, the capital. The chain and its partners have invested about 7 billion rupees (US$148 million) since the first Indian outlet opened in 1996.
"McDonald's considers China and India to be vital for expansion and will continue to invest more and more in both these countries," Bakshi said in an interview. "We would've invested between 10 billion to 13 billion rupees in India by 2005."
China and India, both with populations exceeding 1 billion, are growth areas for McDonald's, which in the last quarter of last year had its first loss since going public in 1965 after a drop in global sales forced it to close some restaurants. Both countries boast a growing middle class whose appetite for Western-style fast food is growing.
Still, the pace of expansion planned in China far exceeds that for India. McDonalds aims to open more than 100 new branches a year in China, according to the
In India, the company is targeting its Chicken-Mexican Wrap and Pizza McPuff at middle-income consumers earning between US$900 and US$3,600 a year. That group is growing as software companies, call centers, banks and auto companies hire more workers to fill overseas orders and cater to local demand.
McDonald's sales in India have risen an average 40 percent a year since its debut in 1996, Bakshi said. The local venture expects to break even by December, he said, declining to give revenue figures.
The expansion drive is targeting locations at new shopping complexes and highway stops. The chain is also varying its menu, with choices adapted to local tastes. It doesn't sell beef in India as the cow is considered a sacred animal, limiting its meats to chicken and fish.
"Indians have always eaten fast food, but now we're seeing a certain degree of openness towards foods that were earlier alien to us such as a pizza or a burger," said Satyajit Lahiri, marketing manager at AT Kearney Ltd, a consultancy. ``Even then, those have also undergone a transformation to suit Indian tastes.'' Having introduced the McCurry Pan, which resembles a rectangular quiche, stuffed with chicken or broccoli and mushroom, McDonalds plans to introduce two products suited to Indian palates by next year. It already sells 14 local-menu choices, such as McAloo Tikki potato patties and Crispy Chinese burgers.
"In the next two years, we should finally have a menu that is entirely relevant to the Indian household," said Bakshi.
Products designed for the Indian market are also being tried by McDonald's outlets elsewhere. Its Pizza McPuff, currently exported to the United Arab Emirates, may be sold in China.
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