When in 1996, McDonald’s arrived in India, there were many who said that things could be very tough indeed in a country where most consumers were not great believers in fast food and preferred to carry home-cooked food even to schools and offices. In just about two decades, the market, both in terms of size and sentiment, has changed dramatically. According to the Economist Intelligence Unit, this year the size of the fast food industry in the country is estimated to be $1.12 billion. With demographic trends developing as they are, India is considered the hottest destination for international fast food players.

When compared to China, the Indian market is just a tenth at present, but whereas the Indian market is growing at a galloping pace, the Chinese fast food sales are actually declining. The reason why the Indian market watchers are so bullish is because the consumer preferences are changing very fast, and the nation has already the world’s largest youth population. Experts opine that a revolution in the fast food industry is just around the corner.

Optimism Rules

Though the country’s population is a whopping 1.2 billion, currently there are only a paltry 2,700 fast food centers belonging to chains. This leaves most of the population out of reach, says a report by Euromonitor International. As of now, fast food retail counters belonging to the organized players are more of a phenomenon seen in the larger cities only, though the tier-2 towns are beginning to catch up fast. What is also adding to the confidence factor of international players is the enthusiasm displayed towards foreign direct investment by the Indian Prime Minister, Narendra Modi.

Everyone agrees that the quick-service restaurant sector in India is still at an extremely nascent stage, and brands do not really have to worry about fighting for customers. Reflecting this confidence, the McDonald’s franchise for western and southern India is planning to open up anywhere between 175-250 restaurants in the span of just the next five years.

Catering To Local Taste Buds

Euromonitor reports that McDonald’s has tweaked a whopping 70% of its offerings to suit local palates. Among the more noticeable departures from its international menu is the complete absence of beef in McDonald’s offers. Beef is a strict no-no in a country where cows are revered. The different offerings have also been considerably spiced up in an effort to please people who have been brought up on a diet of spicy food.

The large vegetarian population has also prompted the company to establish outlets that are completely vegetarian. In a country with 70% non-vegetarian people that may seem as an aberration, but in sheer numbers, it makes eminent sense. A series of such initiatives has made it not only a premium international brand but one that has adapted itself smartly to Indian palates. With a menu completely based on chicken, KFC has had a relatively easier ride in India.

Demographics That Are Worth Billions

Indianization of international menus by US retail chains is only one of the reasons why fast food has become so hot in the country. The surging sales are to a great extent due to the country having the world’s largest young population; there are some 356 million people in the age group of 10-24. Food preferences have changed radically with a larger number of the young joining the workforce and becoming earning members, a surge of females becoming employed, the general growth of the economy, and vastly increased mobility. While American fast food chains are more than willing to tweak their menus, their biggest challenge could very well be maintaining the identity of the global brand, while still having loads of appeal for the local customers.