Yum Plans Widescale International Growth
The chief executive of the world's largest restaurant operator says it's only “on the ground floor” of international growth
In India, where Yum has more than 150 units, business is expected to grow at a pace similar to the China division’s, which is why the company decided to form a separate business unit, Yum Restaurants India, led by president Niren Chaudhary.
Chaudhary said China’s growth story is the inspiration for Yum India, and “India today is at the same inflection point China was before it took off about 10 years ago.”
Novak credited relevant, differentiated products for KFC in India, such as the Vegetarian Zinger sandwich and the Krushers beverage lineup — which accounts for 8 percent of sales — for the brand’s “tremendous upside” in that country.
Taking the menu beyond chicken was a lesson Yum India learned from KFC in China, Chaudhary said, adding that his division “went to school on Yum’s success in China” and would emulate two major moves.
“First, we will build as broad a concept as early as possible for KFC, to be more than chicken,” he said. “We also will establish the first-mover advantage. That taken together implies that KFC needs to be innovative and drive leadership by penetrating faster than our competition with flagship locations.”
Yum India plans to grow to 550 restaurants by 2015, and the current average unit volume there is $1.1 million, Chaudhary said. One snag for building the business in India that did not occur for China is the lag in infrastructure development, Chaudhary said.
“India is muddling through that process, which may constrain us at some level,” he said. “But I think we can create the brand almost anew, because we’re on the ground floor. That’s the China model, and that’s what we’ll do.”