Selling South African pizza in Dubai

Dubai: Mandeep Singh wanted to have a pizza and then went on to sell it as well. Having liked what was served up at a Debonairs Pizza location on an overseas trip, Singh didn’t waste much time in acquiring the local rights for South Africa’s favourite pizza brand. And he did so right at the peak of the recession.

“Having acquired the rights in 2009 it was never going to be easy to launch a new business,” said Singh. “But the only alternative would have been to waste valuable time until the market recovers and that was never going to work.”

The first location thus opened in the Al Garhoud area in 2010 and followed by another at The Dubai Mall last year. Interestingly, Singh believes firmly that opening during the downturn actually benefitted the brand.

“In fact what we found was that pizza sales was recession-proof as paying Dh40 or more would be enough to feed three persons,” said Singh. “The price band had to be something that patrons would find comfort in and that was absolutely in our favour.”

The venture reported a profit 18 months into the launch of the operations and that was critical. The fast food industry in the UAE is saturated with all manner of global and local brands. Getting an edge in, particularly for a new brand, is never going to be an easy run.

But Singh believes that the nature of the F&B industry is that gaps always exists. “It may not make sense to compete with the brand leader in a particular category by going in for all available locations in the market,” he added. “A few strategic locations within high traffic areas can be a good substitute.

“Even then, to compete you will still need to have the financial strength to compete at that level.”

That explains the decision to go to The Dubai Mall. The obvious trade-off for the higher rent that this entailed was being in a high traffic location and the brand recognition it helps build up. “The investments to set up in such a location would be in the range of Dh1 million plus, inclusive of the first quarter’s rentals,” said Singh, who had a catering business before he acquired the Debonairs franchise.

More than the mall rentals, what is a concern for a mid-sized business are the costs involved in recruiting personnel. “This is a people intensive business and the visa processing and associated costs can be a burden,” said Singh.

He also cautions against associating a fast food brand with any particular demographic. “It would have been easy to think Debonairs would instantly appeal to South African residents here since it’s so popular in their own country,” said Singh. “But that would have amounted to making a pitch to a certain demographic and ignoring the rest. The dynamics of the fast food industry won’t work that way.

“Moreover, South African residents are scattered across multiple neighbourhoods in Dubai and we would have been spreading ourselves thin if we chose to be in all such locations. It would have been a big mistake.”

Currently, South African patrons at the two outlets would represent 30 per cent of the traffic. “What it means is we are winning new customers who believe in the gourmet experience and not because the brand is known in their home market,” said Singh as he eyes potential new locations in Motor City and Silicon Oasis and, possibly, introduce a niche chicken brand from Thailand.

Clearly, Singh’s appetite has not been whetted.