High In Demand, Easy On Returns: How Asian Food Is Heating Indian Food Space

It was in 2003 when Ashish Dev Kapur launched Yo!China in India, the indo-chinese version of the quick service restaurant that ruled the hearts of middle class Indians. Little did he knew 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 restricted to noodles; they are trying all kinds of Asian Food starting from Japanese, Korean, Vietnamese, Burmese and Thai. This is not only trending but we are seeing restaurants opening around multiple concepts serving the best of Sushis, Singaporean Roll, Bento Boxes to name a few.

THE BUSINESS MODEL

To start an exclusive Asian food outlet, the investment required is around Rs 18 to 80 lakhs depending on the size (500sqft to 2000sqft). Smaller outlets of about 500sqft are required to focus on deliveries which have become a major business driver in this kind of the concept. Operations costs include Rs 7 lakhs on kitchen equipment, Rs 1.8-10 lakhs on interior designing, Rs 10000- 15000 on licenses, and Rs 7.5 - 20 lakhs on franchise fee.

Monthly earnings may range from Rs 6 lakhs to Rs 15 lakhs, with margins of 18 to 30%. Typical break even 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 urbanization, Indian’s demand for various superior food products along with the urge for experimentation has led to necessitating a possible change in the food consumption pattern. They are warming up to the mixed bag of cuisines and flavours now available to them like Chinese, Japanese, American, Italian etc.

Adding his view on the same Praful Chandawarkar, Owner, Malaka Spice that was one of the first smart dining concept shares, “Footfalls are now divided and spread due to much larger options now available in the market . Average spend has increased marginally by 5%  year on year.”

FRANCHISING FOR BETTER RETURNS

Further, Karan Tanna, CEO, Yellow Tie Hospitality, which runs Wok This Way, a concept where you can make your own wok shares, “There are lot of oriental brands in this space but WOK This Way is unique vegetarian and healthy WOK and Oriental concept in the market. To have the consistency of the product in oriental cuisine, the standardization of sauces is very important.”  “In a franchise model, the franchise owner will get standardized sauces recipe from the franchisee and he will be trained to make every dish in a consistent taste every single time. Hence, because of support of consistency and standardization of not only products but also supply chain service level in entire restaurant business. It is very important to prefer franchising option in this space,” he further adds.

Sharing his view on the same, 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.” He looks for Investment Capability, Know-how of the sector, working style-connect with the Franchisor and on background check while signing a franchisee.

WAY FORWARD

Amid several fears over whether delivery will take over these small food concepts, experts believes that a retail convergence is the way forward. “Footfalls come from all sphere from office to corporate crowd from family to friends outings,” shares Saurabh Khanijo who is running Wanchai by Kylin that does a monthly sales of Rs 15-20 Lakhs of a restaurant that lies under 200-300 sqft.

Thus, we can see that with low on investment and high on profit side, Asian food concepts are really scaling in India. Brands like Mamagoto, Asia Kitchen and Mainland China that are on the higher-end targeting a much more experienced customers are also capturing a bigger pie of the franchise market by enrooting to international destinations.