JFL’s Hong’s Kitchen to take on Mainland China, 5 Spice, others

Jubilant FoodWorks Ltd’s (JFL) foray into the Chinese eatery space with Hong’s Kitchen is set to create a stir in the market that’s dominated by established players and start-ups. Analysts tracking JFL’s business are of the view that the company’s new eatery brand will be a strong contender in the Chinese cuisine category which is also the second most consumed cuisine in the country.

Abneesh Roy, research analyst and senior vice president- Institutional Equities, Edelweiss Securities Ltd, said that Hong’s Kitchen will potentially be a strong alternative to large organised brands such as Mainland China, Yo! China, 5 Spice. “… as well as for small-format Chinese fast food start-ups such as Wok Express, Swiggy’s The Bowl Company, Faasos’s Mandarin Oak and several others that have cropped up in the country, apart from local restaurants and street-side vendors that serve Indo-Chinese fusion food,” Roy said in the note.

A part of Jubilant Bhartia group, JFL is one of India’s largest food service company that operates the pizza chain Domino’s and quick service restaurant chain Dunkin’ Donuts. Hong’s Kitchen is JFL’s first ‘own brand’ that serves Chinese cuisine. It’s first outlet opened at Eros mall, Gurugram on Wednesday.

According to Shyam S Bhartia, chairman and Hari S Bhartia, co-chairman, JFL, the company’s first indigenous restaurant brand underlines their confidence in the growth potential of the Indian food service market in the coming years. “Hong’s Kitchen will help us venture into the Chinese cuisine space for the first time and hence together with the existing brands of Domino’s and Dunkin’ help build a stronger portfolio,” the duo said in a company statement.

Experts believe that there is a big gap between the pricing and offerings of street vendors and premium fine dining restaurants. What also works for the new brand is the restaurant’s young, international-looking and trendy design that’s inspired by the colours and the hustle of Asian street markets.

JFL’s chief executive officer and whole-time director, Pratik Pota, said, “Hong’s Kitchen, with its fast-casual format, will address the vast, unaddressed market through great-tasting and affordably priced Chinese food that’s customised for Indian tastes.”

The key thing to watch for will be pricing, new store openings, capital expenditure (capex) per store, advertising spends, delivery etc. “In the first few years, any new chain makes losses. However, Jubilant already has huge economies of scale in terms of sourcing and real estate and hopefully will try to occupy gaps between street food and fine dining offerings. This will help in keeping margin hit on the lower side,” Roy said in the note.

Going with its strategy of not relying completely on third-party online food delivery platforms, JFL has not yet made the menu items offered by Hong’s Kitchen available on Zomato, Swiggy and other food delivery applications. Instead, the company has its own app on Google Play and Apple App Store for online food ordering in addition to a hotline for phone orders. The minimum order size for online delivery has been kept at Rs 99 and the company is not charging additional delivery/ packing/ other charges.

The menu includes both vegetarian and non-vegetarian food offered at attractive price points. The pricing starts from Rs 99 to Rs 199 for momos and spring rolls going up to between Rs 199 and Rs 349 for noodles and rice, main dishes, combos and chef’s specials.