Delivery for metros, dining for tier-3 and beyond: Domino's has something for everybody

2,000 stores up, Domino’s’ chief business officer walks us through the consumption habits of pizza lovers in the country.

Domino’s has reached the 2,000 store milestone in India with its latest outlet in Gurugram. The franchised QSR chain, operated in the country by Jubilant Foodworks, is currently available in 421 cities across the country, with plans to double the outlet tally in the next five to six years.

Sameer Batra, who joined the brand as its chief business officer last year in March, says that the company, which began its operations in India in 1996, has seen a steady and consistent growth trajectory in its 28-year existence in the country. 

“The first few years were really about experimenting, learning, and tweaking the model for India. The first 500 stores took a large period of time to establish, while the last 500 outlets have come about only in the last two and a half years.”

The new milestone makes Domino’s the first QSR chain to accomplish this number in India, the biggest franchise of Domino’s outside of the U.S. 

But what goes into making a Domino’s store?

Given the brand’s massive footprint across the country, it monitors a few metrics before opening a new shop. These, as outlined by Batra, are crucial to the potential success of the store. More importantly, in many of the locations, Domino’s is a first entrant from the category, which according to Batra, comes with its own set of risks and challenges. 

“We are the first entrant in many of the locations we function in. Therefore the chances of making mistakes are very high. But over the years, we’ve now built a strong model to operate upon and there are certain things that go into expanding our chain,” Batra says.

Firstly, the Domino’s app is a strong indicator of the direction of its expansion. “We have data that tells us where consumers have accessed the app to find pizza, even if the services are not available. Knowing the demand from places where we don’t offer services is a great starting point. When we aggregate this information over a long period of time, it gives us an idea of where the opportunity exists.”

Secondly, the brand also uses a lot of third-party publicly-available information on simple things like car showrooms, ATMs, UPI transactions, smartphone penetration, and broadband connectivity, among other things to determine the viability of a Domino’s store.

“After we’ve done our shortlisting, nothing beats spending time on the ground and assessing the potential of a location,” Batra explains.

Another parameter that helps in making an expansion decision for Domino’s is its ability to offer its trademark ‘30-minute’ delivery in a given location. “If we are to propose thirty-minute delivery in a given location, then the number of stores need to be adequate. So, this also helps in the densification of an already existing location.”

Beyond all of this, young cohorts in colleges, universities, highways, and malls also serve as indicators of a possible new location. 

Dining vs Delivery

In tier-3 and tier-4, the brand has observed that the tendency of a family or a community to go out for a meal is higher. So, the dining percentage in smaller towns for Domino’s is bigger, compared to metros, where, as per Batra, consumption behaviour is more skewed towards ordering in. 

“In many of these towns, we are the first air-conditioned, good-quality QSR experience. So, the percentage of families dining out is much higher. In contrast, Delhi and Mumbai and other metros are busy cities, with people more concerned about convenience. Hence, the desire to call for food at home is much higher.”

Based on this, and other information on the local cohorts of a town, the brand decides between opening a dining store, delivery outlet, or a mix of both. This data also helps the brand in determining the kind of design they want to go with for a particular store.

Speaking of design, Domino’s stores often undergo renovations and redesigns to make the place as attractive as possible. While the core colours of the brand are part and parcel of any store you may stumble across, the overarching real estate may vary.

Batra says, “We are known for red and blue which are our core colours. Having said that, our design principles are getting standardised. We want to be a good, functional dining experience, but we’ll never be a fine-dining restaurant. Our aesthetics will always be about being standard, industry-grade, and being able to do it at scale with the help of our in-house design team."

The brand also avoids variation, while being careful about not stifling creativity in redesigning stores. “We want to be as standard as possible across our stores. But when we want to experiment, we take the liberty to be different, observe the change for a period and see if it’s scalable.”

Business blueprint

Domino’s has a strong presence in the North, which serves as a mix of top markets for the brand. In terms of expansion, the brand is looking to up its game in the West and the South of the country and build up its operations in the eastern markets of Orissa, North-East, Bihar, and West Bengal. In the north, the brand is looking at select markets such as UP, J&K for expansion. 

“These are all dense population states that like to eat out and have a tendency to eat out with good disposable income.”

Domino’s opened about 170-180 restaurants last year, with projections of repeating the numbers this year. Moving forward, in the medium term it aims to get to 4,000 restaurants. 

“In India, enough and more opportunities exist to go to new towns and cities, covering highways, colleges and universities, and being able to expand more in the big cities. In Bengaluru, we have 200 restaurants. But right now, we can easily get 30-40 more stores in the city. And if you extrapolate that across the top 30 cities, the number becomes much bigger.”

Consumer taste

The brand is seeing a lot of affinity from consumers towards more economical offerings in the category. “Indians are looking for a great product at a good price, hence our position of value for money. Our lowest offer is a pizza for Rs 49. It is a replacement for maybe a chai and snack. Another one of our offerings is priced at Rs 99, where the customer gets a pizza, a beverage, three patties, and a gravy item. A four-course meal.”

Another trend is that, there is a higher willingness to experiment among youngsters in India. “We’re also seeing traction on the gourmet range of pizzas in large metros where consumers are more discerning and willing to pay extra,” Batra points out. 

Domino’s also has a portfolio of Indianised products in the country, which are starkly different from the internationally known flavours or recipes Domino’s is popular for. As per Batra, both the line of products serve as a great balance for the brand in terms of revenue in India. 

“Our classics like garlic bread, margherita pizza, and choco-lava cake will always continue to be the mainstay. But if you look at how the international markets have evolved, it involves using a hybrid menu where the core of what Domino’s stands for is established, and on top of that, you develop taste palettes with new offerings.”