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India’s QSR Market Touches $50 Billion, Tier II & III Drive Growth: ASSOCHAM


(QSR) market has remained largely unaffected by the economic slowdown and touched nearly around $50 billion from Rs$35 bn last year, according to the latest study on “Indian fast food market new destination: Tier-II & III cities.”

Owing to the growing need of convenience, increased appetite, a liking for international food, and exposure to global media and cuisine, the annual spending of each middle class household in India’s tier-II and III cities have increased by Rs 2,500 to Rs 5,200, a growth of 108 percent on fast food restaurants in the last two years, the study said.

Commenting on the findings, , Secretary General, ASSOCHAM, said: “The factors propelling this buoyancy include the changing economic and demographic profiles of consumers in India and also exposed to international brands and are far more aware of global trends. Considering a large portion of customers are youth, this remains a key growth driver too. After capturing the tier I cities, Indian fast food market is now spreading its wings in tier-II and III cities. However, there is large room for growth in untapped tier-II and III cities and the future of the Indian fast food industry lies in tier-II and III cities.”

He further added: “More than 65 percent of the population is aged less than 30 years and exposed to international brands. QSRs is one of the sector that has managed to grow even during the economic slowdown.”

The annual average spending of each middle class household in India’s tier-I cities has increased by over 35 percent to Rs 6,800 on fast food restaurants in the last two years. On the other hand, middle- class families in tier-II & III cities are spending much higher in fast food restaurants.

With increased competition and cost of operations in the metros and tier I cities, a number of tier II and III cities may offer better growth prospects for players across sectors, driven by factors such as favourable demographics, infrastructure growth and higher disposable income driven by both strong economic growth and government support through various employment schemes, adds the paper.

“Increase in literacy, high disposable income, exposure to media, greater availability and penetration of a variety of consumer goods into the interiors of the country, have all resulted in creating lifestyle and aspiration levels on a par with other fast-moving metropolitan cities”, highlighted the study.

As per the findings, Indians are eating out more often now, as many as 8 times a month less than US (14 times), Brazil (11 times),  Thailand (10 times), and China (9 times).