Domino’s has found a new delivery address: Bangladesh

Exploring new markets.
Exploring new markets.
Image: Reuters/Anindito Mukherjee
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Drawn by the recent boom in Bangladesh’s emerging middle and affluent class, American pizza chain Domino’s is all set to serve its signature fast-food in the country.

Domino’s will open its first outlet through a joint venture with Indian restaurant company Jubilant FoodWorks and Bangladesh’s Golden Harvest, the two companies said on March 06. Its first outlet is expected to open within a year.

“As the eighth most populous country in the world with the highest population density and a young demographic, the Bangladesh market presents a great growth opportunity for Dominos,” Pratik Pota, CEO, Jubilant FoodWorks said in a statement.

Jubilant runs over 1,100 outlets of the chain in India, where it opened the first Domino’s in 1996 as it master franchisee. Almost a decade later, in 2005, it got additional franchise rights to operate the Domino’s brand in Sri Lanka, Nepal, and Bangladesh—while it has already forayed into the island nation, it is yet to launch in Nepal. Golden Harvest, on the other hand, is a large business conglomerate based out of Bangladesh’s capital city, Dhaka.

Bangladesh’s pizza-delivery market is small, but growing. Between 2011 and 2015, its size increased from $2 million to $3.7 million, according to research firm Euromonitor. “Pizza is a growing food segment in the country as the consumers are opening up to more experimentation in food, especially global cuisines,” Rajeeb Samdani, managing director of Golden Harvest, said in the release.

Serving Bangladesh

Bangladesh is home to over 160 million people.

While it has been plagued for decades by high rates of poverty and crumbling infrastructure, its annual GDP growth has averaged at over 6.4% since 2010 (PDF), World Bank data show. This was driven mostly by the country’s robust manufacturing and services economy. Between 1990 and 2017, its GDP per capita jumped nearly 400% to $1,480.

This recent economic boom has expanded its middle and affluent consumer class, which mostly live in its two largest cities, Dhaka and Chittagong. At 12 million, this demographic constitutes 7% of Bangladesh’s population but is likely to touch 17% by 2025, consulting firm BCG said in a 2015 report.

“We project that each year for the next decade, the annual income of around two million additional Bangladeshis will reach $5,000 or more. That means they will be earning enough to afford goods that offer convenience and luxury, such as air conditioners, imported shampoos, and cosmetics,” the BCG report says.

“The ambition and confidence of the middle-class consumers in Bangladesh has far exceeded our expectations,” said Zarif Munir, partner and managing director, BCG, Malaysia, who also tracks Bangladesh. Munir anticipates the country’s strong economic growth, the density of population, a mobile-phone driven economy, and low language barriers to turn it into a goldmine for consumer goods companies.

A handful of global food chains such as YUM! Brands-owned Pizza Hut and KFC have already been around for over a decade in the country, mostly in Dhaka and Chittagong. While their numbers are still small—Pizza Hut has 16 outlets and KFC nearly 20—BCG’s Munir expects the economic growth to help businesses expand beyond the top two or three cities.