Both Domino’s and Pizza Hut opened their first outlet in India in 1996. Pizza at that time was an alien concept for many Indians. For a newly liberalized economy that envied the unbridled freedom of the American way of life and aspired for American brands (like Coke, Ray Ban, Levi’s, etc), Pizza was seen more as a slice of American life rather than an Italian dish.
So, both Pizza Hut and Domino’s had a tall task ahead of them- of building the ‘pizza’ category in India. Interestingly, both took a different route. Today, about 26 years later, performance wise they both are at different places and may be the route they took made a lot of difference to how far they travelled and where they eventually landed.
Preparing the Base
While Domino’s focused on building a ‘delivery first’ brand, Pizza Hut started off as a fine dining brand. For Pizza Hut- the place was as important as the pizza. The ambience, activity and pizza – all three formed the package. “Ring the bell if you had a good time” was the perfect culmination of this ‘sum total’ of your experience at Pizza Hut.
Domino’s on the other hand, was almost a contrast to Pizza Hut. The Pizza was the hero, not the place. More importantly, rather than celebrating the experience (like Pizza Hut), Dominos started to harp on the promise of predictability- the 30-minute delivery.
Interestingly, when both started out- Pizza itself was a novel idea for most Indian consumers. So, Pizza Hut’s pitch of being an occasional indulgence (eating out in a fine dining was definitely an indulgence in the 90s) with the entire razzmatazz of experience made sense. Consumers, dressed in their best outfits flocked to Pizza Hut to bite into that experience.
But it was a double whammy for Domino’s – which apart from building the category of pizzas was trying to build a category of “in-house” consumption (outside food was mostly an eating out occasion back then). No doubt it would have been tough for the brand to resist the temptation of copying at least some bits of the ‘experience model’ of Pizza Hut.
Baking it with persistence and conviction
Despite temptations, Domino’s stuck to its guns and that’s the greatest lesson one can learn from Domino’s- the lesson of perseverance and persistence in brand building. Dominos stayed true to its conviction that the ‘pizza consumption’ landscape will eventually change- that the biggest driver of consumption will not be indulgence/ experience but sheer convenience.
Consumption patterns don’t change overnight. It takes time- often years. But Domino’s kept at it.
The “30 minutes or free” promise was a masterstroke. In a country that’s generally lenient on time, a measurable promise of on-time delivery with a clear penalty clause (free pizza/s) was unheard of. Such was the power of this promise that many people actually tried ordering pizzas for the first time, just to check if the brand could really honour its commitment.
Brands can also learn a lesson from Domino’s on how to own a strong positioning through powerful storytelling. Domino’s is one of those rare brands that has been both consistent and credible in its brand narrative, since the time of its launch. Over the last two and a half decades, through its advertising- Domino’s has beautifully reinforced its brand promise and given us some of the most memorable tag lines- ta-ra-ra-ra-ra-ri, pizza aaye free, Yeh hai rishton ka time, khushiyon ki home delivery. It would be fair to say that though the product (pizza) was a western offering, the carefully crafted, emotionally engaging narrative gave the brand an Indian soul and a wider mainstream appeal.
It’s the result of such consistent messaging that today brand Domino’s is synonymous with pizzas and the 30-minute delivery promise. There are very few brands in India that are so sharply positioned and so tangibly live their promise.
Adding just the right toppings to keep it exciting
Domino’s has also been quite clever at incrementally innovating its offerings. Keeping a close eye on local tastes, brand innovations are conceptualized to tap on to a specific gap or a business opportunity. Be it garlic bread sticks, as a side product, ‘Pizza Mania’ range – quality pizzas at affordable prices to drive trials; Peppy Paneer Pizzas to cater to vegetarian tastes; Chocó lava cake as an add-on dessert, exotic Italian pizzas as a premium gourmet offering, International flavors marketed as “World Pizza League” to ride on the IPL frenzy (a big home delivery event) or recent launch of India’s first plant-based protein pizza to catch up with the healthy eating trend- all the offerings from Domino’s seem to be underpinned by a clear strategic intent.
Of course, not all of them have struck gold. But the ones that have worked- have become a strong supporting cast for the hero dish of pizzas. In addition, during and post-pandemic, the brand also pioneered the concept of zero-contact delivery- with its product untouched by human hands right from preparation to delivery.
Savouring the slice of success
The greatest lesson that brands can learn from Domino’s is the lesson on scaling up the business and building a category without losing the quality and efficiency of delivery.
The numbers speak for themselves –
Present in 337 cities, Domino’s is the country’s largest food service chain that crossed the milestone of 1500 stores in 2022 (India is the only country after the US where the brand has crossed this threshold), adding 230 new stores and 48 new cities in FY’22 alone.
Empanelled as an official (IRCTC) catering partner for delivering pizzas to passengers, this facility is available at more than 200 stations across India. More than 90% of all pizzas are delivered within the 30-minute delivery deadline and over 70% are delivered under 20 minutes.
The pandemic period in particular marked a momentous shift in online ordering for Domino’s with the brand witnessing a significant jump in delivery sales contribution through online ordering (from 75% to 85%) that has since then risen to 98% in FY’22. Interestingly, the brand also seems to have ramped up its tech side, with app downloads almost increasing by ~3.7x from 8mn in FY’19 to 30.2mn in FY’22- a number that currently stands at 50 Mn.
Who stole my Cheese?
Realizing that Domino’s model is more viable commercially and that the market is increasingly moving towards delivery, Pizza Hut started changing the format of its stores. From an average of 2,000-2,200 sq ft stores in 2015, the stores shrunk to 1,200-1,300 sq ft in 2020. During the same time, the ‘concept’ stores—the huge experiential ones—also dipped in terms as a percentage of overall stores: From 66 percent in 2015 to 26 percent in 2020 while the percentage of QSR stores jumped: From 34 percent to 74 percent.¹
This late realization and a sense of desperate catch-up also reflect in their communication on mass media – new ads, new celebrities, new crusts and new dishes that sometimes border on bizarre (remember Birizza?)
Pizza Hut is trying to shrug off the image of a fine-dining restaurant in India and strengthen their delivery format, however despite the changes in format and even a dedicated marketing campaign to announce the same (“Dil Khol Ke Delivering”), the entrenched notions will take time to change.
The Indian CMO of Pizza Hut summarized this dilemma: “We were not perceived as a delivery brand…..in order to be seen as a delivery brand, people must be aware of the fact that Pizza Hut was big on delivery….. changing perception is a much harder job for a marketing person than changing reality.”
Currently Domino’s has more than 50% share in the overall Indian Pizza market, while commanding a whopping 70% share of delivery whereas Pizza Hut stands at 29% share of delivery. App downloads of Domino’s on Playstore are ~50x those of Pizza Hut. The revenue and geographic expanse of Domino’s is almost double that of Pizza Hut giving it an enormous strategic advantage.
Some speedbumps in Delivery
Domino’s has set its eyes on a target of 3000 stores in the medium term, however, the market conditions are increasingly getting challenging.
Indian Pizza Market for one is getting fragmented. While on the one hand cloud kitchens are launching their own delivery-first pizza brands (e.g. Ovenstory, Mojo Pizza) on the other hand as consumers get more sophisticated in their tastes and delivery options get easier, even gourmet and speciality Pizzas could start taking a pie of home consumption occasion. Hence, Aggregators dominating the delivery side of the business could be a potential challenge for Domino’s.
To be fair, Domino’s seems to be cognizant of this challenge and is constantly ramping up its tech experience by making its app more user-friendly and deploying a dedicated in-house strategy and insights team that customizes consumer experience using predictive analytics. As an excerpt from the FY22 Annual Report of Jubilant Foodworks reads:² “Today in Domino’s app, the customer is shown a personalized menu based on the predicted preferences, which greatly helps reduce order time”. These changes seem to be working- Domino’s app is currently among the best-rated food-delivery apps on Playstore with an aggregated rating of 4.5.
Also, the rising appetite of Indian consumers to experiment and the increasing number of alternatives available today when it comes to eating outside can make it even more competitive for Domino’s.
But for a brand of Domino’s size, it’s almost unrealistic to expect that the momentum of growth will continue at the same pace. It is bound to face challenges. It will be interesting however to see how the brand will tide over these.
Here’s hoping Domino’s delivers happiness. Always.
- FY’22 Annual Reports of Jubilant Foodworks and Devyani International Limited (the Indian Franchisee of Pizza Hut)
Awesome case study. Indepth Analysis. Learnt a lot!
Wow, this is a great article on the power of perseverance in brand building. I especially found the case study on Domino’s to be eye-opening. The brand’s unwavering commitment to delivering fast and fresh pizzas has truly paid off and has even inspired other brands to adopt its unique selling proposition. It’s amazing to see how Pizza Hut also changed its business model to cater to the demand for fast delivery, just like Domino’s.
The story of how Domino’s made the Indian market start liking pizza as one of the main categories of food is truly inspiring. It’s remarkable to see how the brand was able to make its place in the diverse menu cards of Indian foods, and it speaks volumes about the brand’s marketing and branding strategies.
I also appreciate the fact that you mentioned how fine dining brand Pizza Hut changed its strategy and followed the competitor Dominos. This goes to show that even established brands can learn from their competitors and adapt to changing market trends and consumer preferences.
Great job on highlighting the importance of perseverance in brand building!