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What does opening of KFC and Pizza Hut in Nepal imply?

June 6th, 2009

If you haven’t heard about KFC and Pizza Hut opening in Kathmandu yet then that’s one old news already. You can see the interview with the Nepal Unit Manager of the company in eKantipur.com here. The news has already created a buzz in the Nepalese community as can be seen here, here and here. If things go as planned, Kathmanduites will be able to try KFC and Pizza Hut by September 2009.

Investors have been complaining for long that Nepal does not have a suitable environment for investments. With political instability still looming, what does the decision to open two well known fast food chains in Kathmandu imply? Are the investors hopeful about stability or is it that the fast-food industry thrives even during tough times.

Also, KFC and Pizza Hut both have a knack among the youth but still they would have to face tough competition from local favorites like mo:mo. Will these new chains be able to win Nepalese hearts despite declining popularity worldwide due to health issues? In any case, the introduction of international fast-food chains in Nepal would change the fast-food industry for sure. What exactly would be its impact is something we need to wait and watch.

Categories: Analysis
  1. June 8th, 2009 at 19:17 | #1

    @Sanyukta Shrestha
    I am not sure which side to take when the debate is between globalization and national bias. Ideally, Nepal should start with policies suitable for Nepalese entrepreneurs with the goal of making the country globalization ready in near feature.

    If Nepal government thinks that they are doing good by not facilitating foreign investment then they are wrong. Whatever the present Nepalese trade policy is in writing, it has manifested into export-less import-more trade in reality. We mostly consume foreign products; those products were foreign invested. The only difference then is that we are loosing the employment opportunities businesses might have created if they were allowed to invest in Nepal.

    I am not proposing here that this is right or that is wrong. I firmly believe that we need to build a mechanism to analyze what is going on and then think about the best course of action. System wise, Nepal currently is like a car being driven by a blind-folded person.

    (On a completely different note, I am impressed with your creativity in coming-up with a suitable avatar for this forum. Good job!)

  2. June 8th, 2009 at 06:34 | #2

    By more positive foreign investments, I am hinting to those which really explore our potentials than exploit our weakness-

    Early this year, a Chinese company did a lot of work (a) to find gold in Karnali and (b) to install a mining plant.

    This for me sounds very positive although I am not sure about the long run. As long as they comply with the 35% organizational income tax policy of Nepal govt, that sounds fine to me, eh!

  3. June 8th, 2009 at 05:38 | #3

    We should be talking about challenges that our local eat-outs will have to face rather than international brands. Otherwise, like we are having to save our snow leopards and stolen monuments today, a day will come when we will have pictures of momo’s and chatamari’s in national museum!

    1. What type of change in the local restaurant business can be predicted if KFCs and PHs start mushrooming their outlets? The business policy of KFCs and Burger Kings, in London for instance, is such that they even open another outlet just across the street facing each other which still makes sufficient business to beat the rental/maintenance costs of one of the posh streets in Europe.

    During the initial phase when Kathmanduites’ eagerness to ‘taste’ the new-flavour-in-town is ever-rising with the multinational investment pouring into leading media channels, it can be predicted with ease that local attractions for eating out will have to suffer a drop in sale. However, health conscious movements will have to work really hard to prove that buffalo fat is better for us than extra cheese toppings and deep-fried drumstick.

    2. Another issue I would like to raise is whether we want foreign investment that is:
    (a) against public health,
    (b) takes away lot of local economy from franchises as royalties to the first world countries,
    (c) multiplies the cultural downfall of Nepalese eating habits and cookery, and
    (d) adds on to urbanizing traditional architecture of world heritage sites into global brands and sign boards?

    Or we would like to encourage foreign investment which will boost our ultra-potential industries like tourism, art and crafts, entertainment, technology and education to name a few.

    I am not against development and foreign investment but in a country like ours where the policy makers are busy with ‘more important games’ among themselves, who other than the youth can be a better voice for letting foreign influences effect the right sectors of our society?
    If our youth is vigilant and encourage those ventures that can bring about the right kind of change for us, I will assume we know our responsibility.

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