Smaller Cities Bigger Values
“It was little surprising for me when I opened in tier two cities, the behavior in the metro cities and tier 2 & 3 cities is the same, the spending power largely is bigger there because the other expenses of acquisition and living are cheaper,” shared Vikrant Batra, Co-founder, Dhansoo Café & Café Delhi Heights who just sold six lakh Juicy burgers. For restaurant owners these days going to tier-2 and 3 cities is profitable because the minimum wage is less, the electricity cost is less, rent is less. And it makes a lot of sense for restaurant owners to go to these cities though one needs to define their product and find out how scalable the model is before venturing in these markets.
“I'm in total agreement that tier-2, 3 cities has a good future. You must expand them. Our experience with our brand has been very good as we are catering to a larger public,” added Batra by pointing that in these cities you don’t have to innovate much as the same people are more exposed, more enthusiastic to drive new products and the products coming from the metro cities.
Building a National Brand out of a Local Brand
“When we started Kaya in Goa there were two market fits that we were going for. We knew that when we start something in Goa, we are aiming to do a national brand and not a local brand because Mumbai, Bangalore, Delhi restaurants are generally local restaurants where they are mainly competing with local restaurants. Goa is an open market with people from across the country starting units there. So, anything that you do needs to have a more pan-India approach to the grant,” added Pawan Shahri, Co-Founder, Chrome Hospitality that recently opened Kaya Goa and is eyeing to open more such boutique hospitality ventures.
Similarly, when India saw the culture of cafes, especially the tea cafes, people never thought it would scale to the national level but today we see tea cafes as the biggest opportunity in the Indian restaurant scape.
“When we started Chaayos, we actually went and asked potential customers, people who would come to us about their favourite tea and that’s how personalized and customized the tea serving it to a wider audience,” pointed Raghav Verma, Co-Founder, Chaayos.
Trading on Quality
“When we started, coffee in India was at a bad state, whatever good coffee we were producing was getting exported. And what was with us as a consumption was slightly low grade coffee, which is generally not the case in any develop country. And, that’s when we started building this brand on the speciality coffee line. And now even what India behavior is like especially where 50% of the population is less than 40 years old, one thing we identified is quality that is going to be the main driver. And, secondly transparency is something which will play a major role over discount,” commented Shivam Shahi, Co-Founder & COO, The Blue Tokai by adding that giving details like where the sourcing is happening, how we are processing the coffee, origin of coffee, how we are brewing it to a consumer gives a lot of confidence.
Transcribed by: Deeksha Tiwari