New Delhi: Patrick Doyle, president and chief executive officer (CEO) of Domino’s Pizza Inc., was in India to open the 300th store of the chain run by Jubilant FoodWorks Ltd, its Indian master franchisee of 15 years. Doyle, 46, stepped into the role of CEO last week and took the next flight out of the US to reach India, reflecting the importance of the market for the company. (The promoters of HT Media Ltd, which publishes Mint, and promoters of Jubilant FoodWorks are closely related.) Edited excerpts from an interview:
India is the first international market you are visiting immediately after becoming CEO of Domino’s. What does it signify?
The importance of India and Domino’s growth story. For the last couple of years, India has been the world’s fastest growing market for Domino’s. So it was appropriate that the 9,000th store (the 300th store in India is Domino’s 9,000th in the world) opening was celebrated here.
Market importance: Doyle says growth for the company in the next 10-20 years will be international. Pradeep Gaur/Mint
You are taking over as CEO when Domino’s already has 9,000 stores. Where do you take the company from here?
So you are giving me no credit for the 9,000 stores so far (laughs). I have been with the company for 13 years. We opened in India in January 1996. Domino’s was a very US-centric company with a vast majority of the stores there. Fast-forward to 2010: We now have 9,000 stores—over 4,000 stores of these are outside the US. We are probably three-four years away from having more stores and more sales outside the US than in the US.
If you look at the potential for markets around the world such as India, it is clear the future growth for the company in the next 10-20 years will predominantly be international and there is room for us.
Domino’s has been in India for the last 15 years but the real growth in the number of stores has come in the last couple of years.
Last year we have opened more stores here than anywhere else. We opened the 200th store in India in August 2008. In March 2010, we opened the 300th. We built a third of our stores in the last 18 months, so the pace of the growth has clearly got faster.
It took time. I was here a few times between 1999 and 2001 and at that time we were still learning about how to market the product to the Indian consumer. I think we have got the India story right. Over the last four-five years, we had double-digit same-store growth in India.
Any lessons on cracking the Indian market?
In the last 10 years, the change has been really getting the value right for the Indian consumers. We saw a lot of growth from the launch of Pizza Mania 18 months ago. Our entry level pizza priced at Rs35 brought new people into the market for us. So a lot of learning has been around value.
India allows 51% foreign ownership in single-brand retailing. In view of the growth potential here, do you have any plans to convert the franchisee business into a joint venture?
That’s not even needed now as the business is profitable and it’s generating the cash that it needs to grow. It has had a very successful initial public offer and the business is making profits to put back in and reinvest in the business. I hate to say this way, but they (Jubilant FoodWorks) don’t need any help. The capital that they have now is sufficient to grow the market. (Jubilant FoodWorks raised money in a January initial share sale.)
Which are the other developing markets you are seriously looking at?
The fastest growing markets for us have been the UK, France, Turkey and Australia. Korea has also shown great growth, but they are all led by India.
Surprisingly, Domino’s has a limited presence in China. Why?
It has been one market for us which is a little bit more difficult and the reason is the delivery side. The convenience of the delivery (format) for a Chinese consumer isn’t enough value.
We would need to do enough deliveries per week for us to make money. We are delivering there but we have stores with a lot of seats in them. We have 100-plus seats in these restaurants. It is a very different from the model that we use everywhere else.
Their market is dine-in. The consumer in China thinks…“If I am going to spend money for a prepared meal, I am going to go out and be seen.”
Even so, Domino’s has very few dine-ins in China compared with other food service brands.
Yes, KFC has 3,000 stores. But we have had to adapt the model there more than anywhere else. For 64 out of 65 countries, the convenience of delivery has worked. We will figure out China at some point.