CPF Launches Thai Fried Chicken in India

THAILAND & INDIA - India is one of the most attractive places for investment, and its bullish economy has drawn many businesses from around the world.
calendar icon 3 January 2013
clock icon 4 minute read

In recent years, several Thai companies have made their debuts in this emerging economy in sectors such as agriculture, spa treatments, melamine goods and even bowling lanes.

Now this populous country of 1.22 billion people is ready for spicy fried chicken from Thailand.

Bangkok Post reports that Five Star Chicken, a brand under the umbrella of the Charoen Pokphand Group, launched in India two months ago by opening its first branch in Bangalore city.

Sanjeev Pant, vice-president of branded food business for Charoen Pokphand (India) Pvt Ltd, said the business model of Five Star Chicken in India is similar to that in Thailand.

"We offer original fried chicken with a variety of local seasonings but less hot than our dishes in Thailand," he said.

The launch of Five Star Chicken is a new investment by Charoen Pokphand Foods (CPF), the SET-listed flagship of CP Group.

CPF president and chief executive Adirek Sripratak said the firm has expanded its feed and chicken farm business in India for about 15 years, with an investment of US$400 million.

It claims to be the biggest chicken producer in India, supplying meat to restaurants, airlines and hotels.

Its scale means it is able to sell chicken at Five Star Chicken for only 40 rupees (22 baht) a piece, compared with 70 rupee for local brands.

In India, Five Star Chicken's target group are customers aged 15-30 who are students or first-jobbers.

CPF has four Five Star Chicken outlets in Bangalore in formats including a kiosk, a shop in an office building and cool places where youngsters hang out.

"The average sales per outlet is 10,000 rupees per day, higher than our earlier projection of 4,000 to 5,000 rupees," said Mr Pant, who admits he had been worried that the Indian market would not be suitable for Thai-style chicken.

Bangalore was chosen because the city is the world's production hub for information technology, with more than 100,000 people working in the sector. People there have purchasing power and a willingness to try new things.

Although about half of Indians are thought to be vegetarian, Mr Pant believes the other half eat a lot of meat.

"Indian consumers' lifestyles have changed in the past 15 years after the country opened up to foreign investors, leading to a better employment rate," he said.

Salaries start at 15,000 rupees, about five times higher than the average rate in the past two decades. About 60 per cent of Indians are aged less than 30 and their consumption is incredibly big.

Notably, the arrival of international food brands such as McDonald's, KFC and Subway has had a major impact. McDonald's operates nearly 300 restaurants in India, followed by Subway's 275 and KFC's 200.

Sales of these fast-food chains show impressive growth of 20-30 per cent a year, indicating a promising market for the Five Star Chicken brand. Despite the brand's good start, however, Mr Pant sees the market in India as quite challenging because consumers have high loyalty to brands.

CPF is to spend 100 million baht to build brand awareness for Five Star Chicken in India over the next two years.

Mr Pant said the firm would focus on Bangalore during the first year of operation before branching out to other cities including Chennai and Hyderabad in the south and New Delhi and Mumbai in the north.

It plans to open 100 Five Star Chicken outlets in India within two years and extend to 500 within five years.

Five Star Chicken is competing with local fried chicken brands including Suguna, Venky's and Godrej.

CPF plans to open a new slaughterhouse costing 300 million baht in 2014 in Bangalore.

The company also plans to sell chicken and fresh eggs at supermarkets in India in 2014.

CPF targets sales in the next five years in India at US$600 million, 25 per cent of which will be from food and the remainder from farm and feed business.

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