Five Star Chicken fanning out to India and Vietnam

Friday, Jun 28, 2013 11:41

The growth rate of Five Star Chicken outlets is higher in Vietnam compared to India. — File Photo

BANGKOK — The rapid pace of modern lifestyle and the need for convenience has prompted Chareon Pokphand Foods (CPF) to expand its business to the fast-growing economies of India and Vietnam, which have large population - 1 billion and 90 million respectively.

However, Sanjiv Pann, deputy senior managing director of CPF, the operator of the Five Star Chicken brand, says Thai fast-food businesses seeking to expand overseas must select suitable locations, study local consumer behaviour, tastes and preferences and become aware of cultural norms and traditions to ensure good prospects for their business.

It will take some time for Five Star Chicken to be widely accepted by Indian consumers as the company entered the Indian market only late last year, he said. Five Star Chicken hopes to tap the 100-200 million Indian population resident in cities who consume meat, as half of India's population are vegetarians, Sanjiv added.

The growth rate of Five Star Chicken outlets is higher in Vietnam compared to India. However, the competition from international brands such as McDonalds, KFC and Subway is quite intense amid the conducive business environment, which welcomes international fast-food brands and modern discount stores, shopping arcades/malls, as well as CPF's Five Star Chicken brand, Sanjiv said.

CPF aims to establish brand awareness in "emerging markets" before the influx of modern retail trade system to gain a competitive advantage over rivals.

As a Southeast Asian country, Vietnam is a less challenging market for Five Star Chicken in terms of adapting to consumer tastes and preferences compared to India, he said, reflecting on the fast growth in Vietnam. In a huge country like India, there are varying tastes and preferences: south Indians prefer spicy foods; north Indians prefer milder foods, like nan bread; eastern Indians prefer foods similar to Myanmar, while western Indians prefer seafood like the Portuguese, Sanjiv added.

Five Star Chicken has adopted "stand-alone" outlets in Vietnam to gain access to target customers, whose numbers are smaller than in India, but are of a higher premium grade than the ones in Thailand, as CPF wants to establish a strong brand presence among Vietnamese consumers.

As for India, CPF is expanding via the franchise system (60 per cent). CPF will lay out the marketing strategies, management system and create brand awareness during this market-testing period. As Indian consumers' purchasing power rises, CPF believes many Indians would want to own their own small business, similar to the Vietnamese market where ratio of franchise businesses rose to 90 per cent.

CPF plans to expand overseas with the "Great Chicken for every one everywhere" theme with emphasis on city office workers, residents of apartments/condominiums who rely on fast foods as opposed to cooking at home, with airports, hospitals, railway stations as prime locations for Five Star Chicken outlets, Sanjiv said.

CPF also plans to launch Five Star Chicken Café (restaurant and coffee) in addition to its franchise outlets, with investment of Bt2 million. Five locations are initially planned for Bangalore, Sanjiv added.

Another vital thing is the corporate brand or image. Foreign consumers want to know the reputation of the firm behind the brand, the business track record and years in operations, market position etc.

CPF plans to add 500 Five Star Chicken outlets in India within the next two years and 400 outlets in the following five years, while Vietnam should have 250 outlets by this year-end and 800-900 outlets in the next five years, Sanjiv said.

Prime locations for Five Star Chicken outlets in both countries are the major cities such as Mumbai, Chennai, Hyderabad, New Delhi, Bangalore in India, and Ho Chi Minh City, Hanoi, Dong Nai, Hai Phong, Can Tor and Danang in Vietnam, he said. — The Nation/ANN

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