Domino’s Pizza tailoring to local tastes
The international pizza company Domino’s Pizza on Thursday opened its sixth store on Khanh Hoi Street in HCMC’s District 4, marking an important milestone in its development in the local market. The Saigon Times Daily had an interview with Ritch Allison, executive vice president of international of Domino’s Pizza, about the event and the strategy to win the market. Excerpts follow
The Saigon Times Daily: Can you tell us how Domino’s Pizza is doing globally and here in Vietnam?
- Ritch Allison: We have seen enormous growth momentum globally, especially in international business – our international operation has been the accelerant for growth in the past 10 years. We have just opened our 10,000th store in Turkey on September 27 this year. This milestone will be our solid foundation for even greater growth. Among the three international regions, Asia Pacific was the fastest growing region, beating EMEA (Europe, the Middle East and Africa) and Latin America in terms of same store sales growth in 2011. This year, we have surpassed the 2,000th store mark, which is another significant achievement. With Asia-Pacific region on a growth trajectory, there are solid plans in motion to expand further into the region, building our existing markets as well as developing green field sites.
Vietnam has been doing extremely well since we entered the market in November 2010, consistently achieving year-on-year double digit growth. Vietnam simply demonstrated our brand’s strength and relevancy to consumers in developing countries and it is in this regard that the country is one of our most important markets.
How many Asian economies Domino’s Pizza have operated in so far?
- Domino’s Pizza is now operating in 14 Asian economies based on the franchising model: Australia, China, Guam, New Zealand, India, Sri Lanka, Korea, Japan, Malaysia, Singapore, Taiwan, the Philippines, Indonesia and of course Vietnam. We are opening in Thailand by the end of 2012 so we will be in 15 countries and territories. We are market leaders in Australia and India, and a close second in Korea and Taiwan.
How does the Vietnam market perform compare with other Asia Pacific markets?
- The results we have seen for the first two years of performance here in Vietnam have been very encouraging. Vietnam is one of the markets with the highest number of order counts in Asia, which means we are attracting a lot of customers every day. All our stores are doing tremendously well with customers queuing up for our freshly made pizzas every Tuesday during our Two-for-Tuesday promotion.
In terms of potential, how will you compare here with other Asia-Pacific markets?
- Vietnam is a unique country in Asia Pacific with a large proportion of young population, over 50% of the country’s population is under 39, who are typical Domino’s Pizza target customers. With the country’s rising middle-class and increase of income per capita across the board, we look forward to firming up our expansion plans in order to enable the brand to ride the growth wave in this highly important market.
Who are your customers in Vietnam? Is your brand only attracting foreigners and expats as the local consumers seem to prefer traditional noodle and rice?
- We have a pretty good mix of foreigners and local customers in our customer profile. For westerners living in Vietnam they can find their familiar great taste pizzas here such as Pepperoni and Hawaiian, just like those at home, while Vietnamese can find a wide variety of products and consistent product innovation here, satisfying everybody. You will be amazed how receptive the local Vietnamese are towards our products. In fact, our store on Nguyen Tri Phuong Street whereby 99% of the demographic are local Vietnamese has actually become one of our best performing stores in the city, challenging and beating the stores in expat areas. That simply proves to us how the locals loved our product.
How does Domino’s differentiate itself from other pizza companies and fast food chains?
- Since its inception, Domino’s has been a byword for quality and quick service. When you have a pizza delivered, you want to know two things, how good it is and how long it will take to arrive. Domino’s guarantees both these things and this has been the backbone of Domino’s success. Domino’s is committed to providing customers with the ultimate pizza delivery experience and in line with this, we offer the 30 minute delivery guarantee, which guarantees that your order will arrive within 30 minutes or we will give you a free Regular Pizza voucher. Product satisfaction is another Domino’s guarantee that your pizza is guaranteed to be hot, fresh, and great tasting when it arrives at your doorstep, otherwise we’ll replace your order or refund your money. We also offer a 15 minute take-away guarantee, which means that you will receive your Take-Away order within 15 minutes or we will give you a free medium pizza voucher to be redeemed on your next take-away order. We are committed to delivering the best quality services and will continue to develop new ways to improve our services for our customers.
But Vietnamese consumers have not yet accustomed to the habit of delivery. What will Domino’s do to change this perception and consumer behaviour?
- As mentioned before, the country’s middle class is rising with a busier and career-oriented lifestyle as seen in major cities, so pizza delivery has soon become very relevant to local consumers. In fact, delivery contributed to about 40% of our sales and this shows that Vietnamese love pizza delivery. Our belief is to meet the changing needs of customers in different regions and different life stage. Domino’s is proud to be a brand that anyone can order “anytime, anywhere”, from walking into our new Pizza Theatre concept stores where you can see your pizzas made fresh in front of you, to ordering online, whereby consumers can simply order from us through any channel and any way they want.
Is there any thing special about this Khanh Hoi store or just another version of others?
- The Khanh Hoi store is our first full-blown store under the ‘Pizza Theatre’ concept in Vietnam and also in South East Asia. This concept has been developed and tested in our U.S. headquarters. This Domino’s Pizza store will have its pizza-making artists on display as they hand-toss fresh dough and custom-make customers’ orders. The new store design allows flexibility for a number of features otherwise unheard of when it comes to the “traditional” Domino’s Pizza store. Some features include a comfortable lobby, open-area viewing of the food preparation process, including a step platform for children to see the action, and the ability to track carryout orders electronically. The design concept is complemented by a new, single-tile logo, marking a significant change in the branding of the 52-year-old company.
Do you keep the same concept as everywhere in the world, or make change to adapt to the local taste?
- Domino’s Pizza, being a global brand, has brought to Vietnamese consumers international taste with great American Classics flavors like our bestseller Extravaganzza and Pepperoni etc. On the other hand, we always adapt to local market tastes and preferences. For example, in Vietnam we have launched specialty pizzas tailored to local tastes such as the Lap Xuong pizza (Chinese Sausage pizza) to celebrate the Tet in 2011. Also, as we all know Vietnamese love seafood and spiciness, thus it is not surprising to see that the Seafood Pizza is actually our best selling product in Vietnam.
One of the big players in the pizza market is Pizza Hut, who seems to be omnipresent recently. What do you think about the competition here?
- Vietnam is a market with tremendous opportunities for pizza, with strong and robust economic growth, which attracted a lot of foreign investments which bring in a lot of consumers with western tastes. At the same time, as average household income increases in this country, people living in the six major cities, especially HCMC and Hanoi, have become more affordable for pizza and international food brands. We are very positive on the future of our business in Vietnam. Competition on pizza has previously been dominated by a single player. And with our entering the market in 2010, consumers have a greater variety of choices. This also lifts the consumer’s overall interest and awareness in pizza.
Thank you very much
Reported by Phi Tuan