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The bigwigs are here
NOV 20 - Forget sekuwas and momos for now. The Kathmandu consumer will soon be a part of the global bandwagon, for what we will have soon is probably, along with McDonald’s, one of the signs that globalisation has finally touched our Capital.
For months now, Kentucky Fried Chicken (KFC) has got the tongues wagging in the Capital. Everybody, from the baje in the chia pasal to the neighbourhood parking attendant, knew it was coming. And for those who’ve been waiting, KFC will finally open on Sunday at the Annapurna Complex in Durbar Marg.
But KFC is not flying in alone. It’s bringing with it its sister restaurant-chain, Pizza Hut, and obviously, as with their other 36,000 locations around the world, it is looking to capture the minds of the larger public. And though it is not known yet whether it will glocalise (globalise + localise) to cater to Nepali tastes, it will introduce the country to a brand that has captured the fast-food market in at least 109 countries.
But what will the launch of KFC and Pizza Hut mean for Nepal? Shyam Kakshapati, CEO of Nanglo chain of eateries, thinks the entry of the two international brands will mean the creation of an additional market in the huge pie of fast-food. “Their entry doesn’t necessarily mean a threat for us.” And any fears that the two biggies will steal his clientele remains unfounded. “They might go to the two restaurants initially as an experiment, but they will come back to me,” says Kakshapati. A Management professor thinks otherwise. “The two brands may not hamper the sales of other outlets initially…but if the pricing of their products is reasonable, consumers may switch from their existing preferences,” says the consumer-behaviour professor, who wanted to remain anonymous.
The location of the outlets also raises an interesting question regarding the outlets’ clientele. KFC’s famed chicken will be coming in from Brazil—and though it plans to cut costs by using local perishable products, the imported chicken will certainly form a major part of the costs. But it intends to offer a competitive price range, as it has done in its other outlets in the region. The chain also plans to expand to other outlets inside the Valley as well as in Pokhara—targetting the tourist economy there. The brands’ targets mean it’s serious business time for the existing fast-food chains, for they must begin to update their pricing according to the two international brands, who have the financial muscle to unnerve the competition.
There is also the question of whether the two international brands will localise their products to suit Nepali tastes. For example, in India, McDonald’s and Pizza Hut have both localised themselves so that outlets now serve the uniquely-named McAlu-tikki Burger, and the Chicken Tikka Pizza. There are feelings that the two outlets in Nepal will seek to test the waters here, and bring in their international menu before localising themselves “according to the demands of the consumers,” says the professor.
One of the pluses of globalisation is that the entry of international brands or companies means the entry of different work standards and ethics. The company behind KFC and Pizza Hut here, RJ Corporation, has trained its staff for consumer-handling according to its international norms and standards, but will that be enough for a country like Nepal where militant labour has shut down many international industries? Of course, the two brands’ international-standard labour practices mean that other existing fast-food chains must begin to adopt similar practices as well, as consumer-handling will definitely be an additional plus for the two brands.
What the entry of the brands actually means for the Nepali consumer remains to be seen, for eating-out is still in a nascent culture here, but the entry of KFC and Pizza Hut may just change all that.
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