By Pratyosh Gogoi
When the news that Haldiram, a business venture that started in a small shop in Rajasthan’s Bikaner, overtook the global snack giants McDonald’s and Domino’s in the Indian market flashed, most of us were left with the mixed emotions of pride and surprise.
While it is great to hear that an Indian brand is doing so well in a sector that is prone to so much competition, it is imperative to be surprised due to the fact that the competitors it beat are expanding like a bacteria during fission. We at ED try to figure out how this was possible.
The Spectacular Operational Structure
Haldiram’s is a wholly owned domestic entity in itself as opposed to its various competitors like McDonald’s and Domino’s, which are franchises of foreign entities.
A part of the operating profits of international franchises are directed towards payment of franchise costs incurred and the various taxes levied upon foreign companies operating in India. Haldiram’s on the other hand, has its profits undiluted of such overheads; thus being at an advantage. Nepotism for homegrown industries, you can say.
Comparatively Low Promotional Spends
Although Haldiram has recently started TV commercials to keep up with the times, they had their job half cut down because of the fact that the brand and the menu is not alien to the average Indian household.
While foreign franchises have to spend a lot to ‘teach’ an Indian ‘how to eat a pizza’ or ‘how to eat a burger’, we all know how to eat a samosa or a vada pav.
Obviously Low Operational Costs For Desi Food
Let’s take a look at the menu of Haldiram. Six pieces of Golgappas are charged at 58 rupees- and it costs 20 outside. Same for two pieces of Gulaab Jamun charged at 48 rupees. And all these prices are exclusive of taxes.
On the other hand, if we take a look at the raw materials used to make these delicacies, we see the humble atta, maida and sugar- things that don’t come at an exorbitant price.
Thus, they are able to maintain an over 200% margin on every single sale. It’s somewhat like you buying something and selling it for twice the cost at OLX.
Hands Down, Appealing To All Age Groups
The prospective customer base of Haldiram is wider across age groups and socio-economic classes. Moreover, the outreach of Haldiram outlets and products even extends to smaller towns and scores higher on relatability amongst such masses.
For example, you’ll find a packet of Haldiram Bhujiya in the remote town of Dhemaji where I come from but to get a burger from McDonald’s, I have to travel 500 kilometres to Guwahati. So much for a piece of meat, eh?
The Indian appeal of Haldiram brings with it a sense of longevity.
Thus, even though a lot of foreign franchises have come to and gone from the Indian market, the traditional Indian houses have maintained a stronghold. And as Kunal Aggarwal, a member of the founding family says, “We (also) understand Indian palate well and that comes handy while launching new products.”
Image Credits: Pratyosh Gogoi & Google Images
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