Local businesses
We shall overcome
Bootstrappers can whip #ss of big businesses
Italian bootstrappers have forced Domino’s to file for bankruptcy. Superior pizzas by local businesses, lack of demand for American styles pizzas and pandemic were the key reasons for the bankruptcy. India is Domino’s largest international market with 1495 outlets.
Italian franchise E Pizza had planned to open 880 stores by 2020. Instead, they could only open 29 stores. First pandemic dented the growth with restrictions. Then local pizzerias adapted to the new normal. They started using delivery apps to deliver the pizza. Locals disliked the American style pizzas with more cheese and toppings such as pineapple. Home delivery and cheaper pizzas were the only differentiators for Domino’s. Not just Domino’s
As per Yahoo Finance: Its ambitious expansion ran into trouble as traditional pizza makers scaled up deliveries or signed deals with third-party services such as Deliveroo Plc, Just Eat Takeaway.com NV or Glovo to bring their products to customers’ homes while restrictions prevented dining out.
There are about 63,000 pizzerias in Italy. The pizzerias employ about 100,000 pizza makers. On an average, each pizzeria sells 80 pizzas a day. In total, Italians consume 10 lakh pizzas a day. Norway, USA, UK, and Germany consume more pizzas than Italy. As per Quartz, more than 35% of pizza makers are foreigners and more than half of pizzerias are owned by foreigners.
Why does it matter for India? Bootstrapped businesses such as pizzerias in Italy are the key generators of entry-level jobs. Darshinis in Bengaluru are Indian counterparts of Italian pizzerias. Nearly all darshinis are profitable and employ unskilled or semi-skilled workers. Zoning laws, lack of formal finance and unfriendly municipal laws do not allow such businesses to thrive in the rest of the country. One bootstrapped business in Noida has inspired more than 50 businesses. Strong local and bootstrapped businesses are a nightmare for big businesses. Starbucks closed 70% of its stores in Australia, where most coffee shops are bootstrapped. McDonald’s in Iceland had to quit the country as it could not compete with the local burger chain.
It’s not easy running a bootstrapped business. We need more such stories in India. Let us build something.
