The list of opportunities ready for the taking in the food and other service areas is rather long. Amongst the most interesting ones in the food sector are the following:
- Indian fast food/finger food: While pizzas and burgers and popcorn may find a lot of favour from Indians across India, and across all age and income groups, the fact remains that almost all regions of India still have their own local fast food options and outsell the "imports" by a mile.
MacDonald's and Pizza Hut can be the role models in terms of efficiency of service, hygiene, quality, and overall value but the menu should be "Indian" rather than Indianised version of American food.
- Family diners: These can be based on the ubiquitous American Diner concept or even the Indian version like Nirula's offering Indian style "Plated or Combo" meals with table service and overall good price-value equation.
- Sandwich & salad parlours: Subway's success in select locations, despite somewhat inconsistent product quality, poor service, and high prices, indicates the tremendous opportunity in this segment. Prêt a Manger (A Macdonald business, operating largely in the UK) seems like an interesting format for India.
- Bread and other bakery product outlets: As per KSA studies on the eating habits of urban Indians, specialty bread and other baked products are very high on the changing preferences. The success of five-star-hotel-based bakeries for the upmarket consumers indicates the potential in this category. An extensive, international, menu, backed with competitive pricing and good service, should do the trick.
- Multi-cuisine food courts: For a country having such a wide repertoire of cuisines, and the ever increasingly more adventurous Indian palate, and the growth in eating out as an activity, multi-cuisine food court businesses (Indian and international cuisines) located not only in the shopping malls but even stand-alone locations offer exceptional opportunity.
- Ice-cream and juice/beverage parlours: Sadly, there have been many start-ups and some continue to do well such as Nirula's. However, there is a glaring gap between the appropriate price/value need and the available options if one were to note that Nirula's is largely Delhi-based and the only other choice is perhaps Baskin Robbins.
Lack of success in the recent past of some of the start-ups only highlights the need for a better conceptualisation and execution of the format, rather than a lack of market opportunity.
- Indian "desserts" and "snack food" chains: Lastly, in the genre of food and food service chains, one of the biggest opportunities remains in starting national or at least regional chains offering Indian mithai, namkeen/farsaans, and snack-foods such as pakodas and samosas. Haldiram's success should certainly put any doubt on this opportunity to rest. What is needed is a belief that the Haldiram business model can be replicated (and certainly improved upon from the customer service perspective) by even large business houses such as ITC and others.
Moving beyond the food and looking at other service opportunities, the following stand out (amongst many):
- Specialty tourism: India is incredibly blessed with one of the most diverse set of options when it comes to tourism. Fortunately, the perception of India as a tourist destination is also undergoing a very positive change outside India.
Creating specialised options for high-end tourists from the West offers a tremendous potential, with many segmentation possibilities based on the target market as well as special interests. Role models can be the likes of Abercrombie & Kent.
- Personal grooming salons: It may surprise some that the biggest organised player for personal grooming (Regis Corp, US), with focus on hair care, will clock revenues of over $2 billion (over Rs 9,000 crore) from over 10,000 salons in North America. Yet, in a country with over 1 billion, we have only an isolated Habib's to talk about.
- Career counselling centres: With over 25 million births per year, and at least 3 million of these likely to go for studies beyond the 12th grade but having little idea about the job and vocation trends in India and beyond, this is one sector that is poised for rapid growth.
- Chain of repair and maintenance services for electricals/electronics products: India is seeing massive increase in the penetration of electrical/information technology products.
Yet, the ambient infrastructure, as well as relatively low income levels, requires most of these gadgets to be given for repair unlike the more affluent countries where many faulty appliances/gadgets may just be "written off" by the consumer in view of high cost of repairs.
India's low labour related service costs can provide a cost-effective solution to the millions, while generating good returns on investment for the entrepreneur.
- Document preparation, imaging, and storage centres: With the large industry (whether public or private) unlikely to provide an adequate number of jobs for the millions of new entrants annually in the market, small businesses will remain the backbone of job creation and economic growth for India.
Many of these businesses will need a wide range of documentation-related services that are typically done in-house by larger companies. Kinko's (now a FedEx company) has thrived on this need in the US and other countries. A pan-Indian model can provide excellent opportunities to a few Indian entrepreneurs.
This list, by no means, is not exhaustive but only illustrative of the incredible entrepreneurial opportunity India currently provides in the services sector. What is needed (again) is the ability to think on the obvious.
In many cases, global role models already exist. In others, models have to evolve on the basis of current Indian market needs and preferences. Once again, I hope many of these opportunities would be grabbed by existing Indian business groups as well as new entrepreneurs.
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