Dhakaites devour fast foods worth Tk 8.0m a day
Saturday, 24 April 2010
Mehdi Musharraf Bhuiyan
After years of market saturation in the Dhaka's major uptown areas, brand fast food restaurants are now eyeing the mostly untapped part of the capital and the major suburbs to open outlets aiming to double their market size to Tk 6.0 billion in the next five years.
Big names in the industry expect a growth of 20 per cent in revenue and customer size over the next 12 months as the overwhelming craze for ready food in the country's posh areas has already pushed the market to an estimated Tk. 3.0 billion mark.
Sources say that this upcoming growth could be driven by arrival of a number of major international brands while a number of local restaurants are also reportedly looking for franchising in the district towns and suburbs as a possible of way of expanding their network.
"We are planning to open 50 KFC and Pizza Hut outlets all across the country by 2015, 15 of which would be based outside Dhaka", said Akku Chowdhury, Executive Director of Transcom Foods Limited, a subsidiary of a local business conglomerate.
Both KFC and Pizza Hut, of which Transcom Foods is the local franchisee, are also subsidiaries of the world's largest restaurant chain Yum.
Now indications are there that at least four other major international fast food chains are also in the pipeline to make their debut in the local market by the end of the current year.
"This year, we will open our first KFC outlet in Cox's Bazar, which is now frequented by tourists all the year round", Choudhury said adding that divisional towns like Sylhet and Chittagong would be in focus where "we have identified an emerging market as the local residents there have developed a habit for dining out".
Transcom opened its first Pizza Hut outlet in the city in 2003, followed by its maiden KFC outlet in Gulshan three years later. In between them, A&W- another subsidiary of Yum Brands Inc.- also opened its outlet in the capital.
The growing presence of three leading brands of the world's largest fast food chain in the capital over the years have come to signify the growing popularity for quick service meal among the country's booming middle class consumers.
"From our eight outlets around the capital, we are serving around 4000 customers a day, which easily makes us one of the leaders in the arena", says Nazimul Karim Chowdhury, Executive Director of Best Fried Chicken (BFC)- one of the leading fast food chains of Dhaka.
Lately, Helvetia, another leading local fast food chain, has unleashed an ambitious plan to open around 30 outlets around the country's suburbs through franchises to grab the biggest share in the market.
Fast food restaurants first grew popularity in the urban areas back in the 1990s, as the new wave of globalization started to hit the country's major metropolis, while the quick service method of such restaurants increasingly suit the dining need of the growing busy urban dwellers.
Now, riding on that massive popularity, fast food outlets have become a multi billion taka industry in the country, with one insider estimating that on average, fast foods worth around Tk. 8.0 million are sold in the capital every day, which puts the gross revenue of these fast food retailers at Tk. 3.0 billion annually.
Apart from big chains, petty fast food outlets have also sprouted in the nook and corner of the capital, serving the everyday dining needs of millions of busy city dwellers. It is estimated that there are 105 fast food outlets in the food court of the city's Bashundhara City Shopping Complex alone.
With chicken being the most common ingredients of fast food items, these restaurants are also a major buyer of the country's booming poultry farms, with one insider estimating that everyday, almost 8000 chickens from the country's major poultry farms found its way to Dhaka's quick service restaurants.
"In 2008, we served a million customers from our KFC and Pizza Hut outlets while a year later, the number of customers in these outlets rose to 1.5 million", Akku Choudhury said.
"At the same time, our gross revenue from these outlets increased by almost 66 per cent to reach Tk 500 million in 2009 from Tk. 300 million a year earlier", he added.
However, the major international names in the arena are facing stiff competition from their local counterparts due to higher investment and operational cost as well as strings of formalities in importing raw materials.
The initial investment in setting up an international franchise is seven to eight times higher than setting up a local one, an insider said.
"Apart from that, much of our food ingredients apart from bread and chicken have to be imported from abroad", said a representative of A&W in the capital. "Which means, to be competitive, the profit margin has to be lower for an international franchise than a local player", he added.
After years of market saturation in the Dhaka's major uptown areas, brand fast food restaurants are now eyeing the mostly untapped part of the capital and the major suburbs to open outlets aiming to double their market size to Tk 6.0 billion in the next five years.
Big names in the industry expect a growth of 20 per cent in revenue and customer size over the next 12 months as the overwhelming craze for ready food in the country's posh areas has already pushed the market to an estimated Tk. 3.0 billion mark.
Sources say that this upcoming growth could be driven by arrival of a number of major international brands while a number of local restaurants are also reportedly looking for franchising in the district towns and suburbs as a possible of way of expanding their network.
"We are planning to open 50 KFC and Pizza Hut outlets all across the country by 2015, 15 of which would be based outside Dhaka", said Akku Chowdhury, Executive Director of Transcom Foods Limited, a subsidiary of a local business conglomerate.
Both KFC and Pizza Hut, of which Transcom Foods is the local franchisee, are also subsidiaries of the world's largest restaurant chain Yum.
Now indications are there that at least four other major international fast food chains are also in the pipeline to make their debut in the local market by the end of the current year.
"This year, we will open our first KFC outlet in Cox's Bazar, which is now frequented by tourists all the year round", Choudhury said adding that divisional towns like Sylhet and Chittagong would be in focus where "we have identified an emerging market as the local residents there have developed a habit for dining out".
Transcom opened its first Pizza Hut outlet in the city in 2003, followed by its maiden KFC outlet in Gulshan three years later. In between them, A&W- another subsidiary of Yum Brands Inc.- also opened its outlet in the capital.
The growing presence of three leading brands of the world's largest fast food chain in the capital over the years have come to signify the growing popularity for quick service meal among the country's booming middle class consumers.
"From our eight outlets around the capital, we are serving around 4000 customers a day, which easily makes us one of the leaders in the arena", says Nazimul Karim Chowdhury, Executive Director of Best Fried Chicken (BFC)- one of the leading fast food chains of Dhaka.
Lately, Helvetia, another leading local fast food chain, has unleashed an ambitious plan to open around 30 outlets around the country's suburbs through franchises to grab the biggest share in the market.
Fast food restaurants first grew popularity in the urban areas back in the 1990s, as the new wave of globalization started to hit the country's major metropolis, while the quick service method of such restaurants increasingly suit the dining need of the growing busy urban dwellers.
Now, riding on that massive popularity, fast food outlets have become a multi billion taka industry in the country, with one insider estimating that on average, fast foods worth around Tk. 8.0 million are sold in the capital every day, which puts the gross revenue of these fast food retailers at Tk. 3.0 billion annually.
Apart from big chains, petty fast food outlets have also sprouted in the nook and corner of the capital, serving the everyday dining needs of millions of busy city dwellers. It is estimated that there are 105 fast food outlets in the food court of the city's Bashundhara City Shopping Complex alone.
With chicken being the most common ingredients of fast food items, these restaurants are also a major buyer of the country's booming poultry farms, with one insider estimating that everyday, almost 8000 chickens from the country's major poultry farms found its way to Dhaka's quick service restaurants.
"In 2008, we served a million customers from our KFC and Pizza Hut outlets while a year later, the number of customers in these outlets rose to 1.5 million", Akku Choudhury said.
"At the same time, our gross revenue from these outlets increased by almost 66 per cent to reach Tk 500 million in 2009 from Tk. 300 million a year earlier", he added.
However, the major international names in the arena are facing stiff competition from their local counterparts due to higher investment and operational cost as well as strings of formalities in importing raw materials.
The initial investment in setting up an international franchise is seven to eight times higher than setting up a local one, an insider said.
"Apart from that, much of our food ingredients apart from bread and chicken have to be imported from abroad", said a representative of A&W in the capital. "Which means, to be competitive, the profit margin has to be lower for an international franchise than a local player", he added.