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Jun, 13 2019

ASIAN CUISINE: COOKING UP CLASSY PROFITS

With the Indian consumer now having turned bold enough to try a huge variety of cuisine – and that includes Asian food to a great extent –restaurants in this sector now make for an attractive business model.

It was in 2003 when Ashish Dev Kapur launched Yo!China in India, the Indo- Chinese version of the quick service restaurant that eventually began to rule the palates of middle-class Indians. Little did he know then that India would witness an altogether different and more diversified palate when he would expand the brand in over 15 years’ time. Today, people are no more attracted to just noodles, fried rice or soup; they are trying all kinds of Asian food starting from Japanese, Korean, Vietnamese, Burmese and Thai. This trend now encompasses restaurants opening to serve the best of sushi, Singaporean rolls, bento boxes (single-portion take-out), to name a few. Rs 7 lakhs on kitchen equipment, Rs 4-10 lakhs on interior designing, Rs 10,000- 15,000 on licenses, and Rs 7.5-20 lakhs on franchise fee. Operational expenses run into Rs 3.2-7.6 lakhs, which include roughly Rs 1-2.5 lakhs in rent, Rs 1.5-3.75 lakhs on raw material, Rs 30,000-Rs 75,000 on total salaries for 2-5 employees, and

THE BUSINESS MODEL

To start an exclusive Asian food outlet, the investment required is around Rs 18 to 80 lakhs depending on the size, which could range from 500-2,000 sq. feet. Smaller outlets of about 500 sq. feet focus on home deliveries – a major business driver in this kind of concept. The startup costs include Rs 7 lakhs on kitchen equipment, Rs 4-10 lakhs on interior designing, Rs 10,000- 15,000 on licenses, and Rs 7.5-20 lakhs on franchise fee. Operational expenses run into Rs 3.2-7.6 lakhs, which include roughly Rs 1-2.5 lakhs in rent, Rs 1.5-3.75 lakhs on raw material, Rs 30,000-Rs 75,000 on total salaries for 2-5 employees, and Rs 60,000 on miscellaneous items.

Monthly earnings may range from Rs 6-15 lakhs with gross profits of 18-30%. Typical breakeven time is anywhere between 1-2 years.

Commenting on how the demand for Asian food is consistently growing year-on-year, Aayush Agrawal, Director, Wok Express, says, “With rising per capita income and urbanisation, the demand for various superior food products along with the urge for experimentation has led to a change in the food consumption pattern.” Adding his views on the same, Praful Chandawarkar, Owner, Malaka Spice, one of the pioneers in fine-dining, says, “Footfalls are now divided and spread due to much larger options available in the market. The average spend has increased marginally by 5% year on year.”

EFFICIENCY THROUGH FRANCHISING

Further, Karan Tanna, CEO, Yellow Tie Hospitality, which runs Wok This Way, a concept where you can make your own wok, shares, “To have the consistency of the product in oriental cuisine, the standardisation of sauces is very important. In a franchise model, the franchisee will get standardised recipes for sauces from the brand owner and will be trained to make every dish in a consistent manner. With this emphasis on consistency and standardisation of not only products but also the supply chain management, franchising is the best option in this space.” Sharing his views, Kapur, who has expanded Yo!China to over 40 outlets, says, “Consumers order more from branded spaces. A franchise of a brand guarantees a certain business.”

THE WAY FORWARD

Amid several fears over whether delivery will take over these small food concepts, experts believe that a retail convergence is the way forward. “Footfalls come from all spheres – from office to corporate crowd and from family to friends’ outings,” shares Saurabh Khanijo, known for the brand Wanchai by Kylin that does a monthly sales of Rs 15-20 lakhs from a restaurant that is just under 200-300 sq. feet. It is evident then that with it being low on investment and high on profit, Asian food concepts are really scaling up in India. Brands like Mamagoto, Asia Kitchen and Mainland China, which are on the higher-end, are now targeting much more experienced customers and also capturing a bigger pie of the franchise market.

STARTUP COST: 18-20 lakhs

OPERATIONAL EXPENSES: 3.2-7.6 lakhs

MONTHLY REVENUES:  6-15 lakhs

GROSS PROFITS: 18-30% of the revenues

BREAKEVEN TIME: 12-24 months

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