At first glance, it seems like an unlikely relationship: a country where roughly a third of its citizens are vegetarians courted by an American company selling Mexican-inspired fast food primarily based on beef. It seems even more unlikely when that country is India: a country of 1.3 billion people – 79% of whom are Hindu – and the fast food restaurant is Taco Bell. Nevertheless, Yum! Brands announced last year that it would expand to 100 new Taco Bell stores throughout India by 2021, despite only having opened 9 in India since 2010. The expansion comes as the company recognizes its success in becoming a brand after penetrating the Indian market without beef.
Here's a look at how Taco Bell found its footing in India and what other companies can learn from it.
1) They understood the market – and the culture – they were going into and adapted accordingly.
The Three Vs.
Although Yum! had seen previous wins with Pizza Hut and KFC in India, preparing a Taco Bell for the Indian market wasn't something they undertook overnight. “It took us over two years to perfect our three Vs for India — value, vegetarian and variety,” said Ashok Bajpai, a general manager at a Bangalore Taco Bell in an interview with PRI.org.
Taco Bell filled a pricing range that, at the time, fell between McDonalds and street food. Its menu started at 18 Rupees: then approximately 40 American cents. As in America, this price point found a target in high school and college-aged consumers: something India, with a median age of 27, has no shortage of. In addition to attractive pricing, Taco Bell was the first fast food restaurant in India to offer free refills: a concept that initially baffled their customers, but soon caught on, making Taco Bell a destination; a place to hang out with friends.
That pricing has remained largely the same, even as the company slowly changes its image as a fast food company in India: a recent Twitter post advertised a 10-taco, 4-drink deal for 499 Rupees (about $7.75).
Value and Variety
A quick look at the Taco Bell India website shows that more than half the menu is vegetarian. Yum! Brands pulled beef from the menu entirely, opting instead to have different types of seasoned chicken, refried beans, fried "potato bites," vegetables, and paneer cheese as fillings. There are also regional-styled fusion offerings like a tikka masala burrito, as well as rice bowls and potato dishes.
2) They recognize the power of branding.
Taco Bell's price point coupled with the novelty of an "exotic" food from a western brand proved to be a winning combination. "What we are seeing in India is similar to what we saw in China a decade ago," Yum! Brands' Graham Allan said in a 2010 interview with The Wall Street Journal. "You have a young population with improving standards of living and an enthusiasm to embrace Western brands."
The company's social media, which includes Facebook, Twitter, and Instagram, embraces their image as a "young" brand. They keep track of trends. They're aware of their casual, hipster image. They've even teamed with local DJs for in-store performances. In short, they're relevant.
3) They embrace change and choose to evolve.
As the company gears up to start opening more stores, they're hoping to shed some of its reputation as a fast-food brand. “We don’t want to be a regular fast-food chain but something above that," said Ankush Tuli, Taco Bell India's Managing Director, in an interview with Quartz, adding "We don’t want to play the low-price game like other fast food chains.”
That shift in strategy is best reflected in the company's New Delhi store at the Epicuria Food Mall which offers a table service option, live sports screenings, and draft beer and cocktails in a rustic, hip warehouse atmosphere accented with graffiti murals in Hindi that read "Quesadilla" and "Nachos." Imagine a Brooklyn hipster loft converted into a Taco Bell and you'll get some idea of what we're talking about.
It's a tactic that makes sense without alienating the younger end of its base. The demand is already established, so expanding to attract young professionals – those who regularly go out to eat – can only establish Taco Bell as more than just a novelty brand in India as it expands to meet its market.