In today’s Finshots, we tell you why the world’s third-largest pizza delivery company, Papa John’s, wants to take a second shot at India.

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The Story

There are usually two ways a company can capture a market. One, it can take the first-mover leap into uncharted waters, introducing a product no one’s seen before. It breaks in, learns the ropes, adapts, and grows with the market. Two, if the first mover has already nailed it, you still enter—only this time, you play the challenger, trying to win by doing things differently.

And every industry has both kinds of players. In food delivery, Zomato set the pace, while Swiggy and Rapido came in later as challengers. In quick commerce, Blinkit took the early lead, followed by Zepto and Instamart. In ride-hailing, Ola was the pioneer, with Uber and Rapido following suit.

But in today’s story, we’re zooming in on India’s quick service restaurant (QSR) market. More specifically the pizza game. Here, there’s no debate about who the first mover is. It’s Domino’s. The challengers? Pizza Hut, La Pinoz and a bunch of smaller regional brands.

Now, whether you’re a successful first mover or a competitor, it’s not easy being either. Both need to fight hard to hold onto their slice of the pie. Because first movers don’t always stay on top forever. Except Domino’s in India has managed to do exactly that.

It entered the country in 1995, right when India was opening up its economy to the world. Back then, most people weren’t exactly craving a foreign dish with bread, cheese and tomato sauce. But Domino’s figured out what mattered most — price and taste. So it created a range of affordable pizzas tailored to Indian palates. Vegetarian toppings. Tandoori flavours. Pocket-friendly meals. The formula clicked.

Even Pizza Hut tried to play the same card, but Domino’s had already grabbed the first-mover advantage. And today, it controls more than half of India’s organised pizza market and nearly 70% of online pizza delivery. Everyone else is still trying to catch up.

Which makes it all the more surprising that Papa John’s, another big American pizza chain, wants to return for another shot at India, despite failing miserably the first time.

For context, Papa John’s is the world’s third-largest pizza chain. It quit India in 2017 after a disappointing decade-long run. But now it’s back. Its first new store will open in Bengaluru in a couple of months, with plans to launch 650 outlets across the country over the next few years.

But why try again after burning your fingers once, you ask?

To answer that, let’s rewind to why Papa John’s failed the first time around.

The simplest explanation is this: everything Domino’s did right, Papa John’s didn’t.

To begin with, when it entered India in 2006, its goal was to challenge Domino’s and Pizza Hut. It saw a booming middle class and aimed to ride the wave. But instead of adapting, it stuck to its American playbook. It positioned itself as a premium brand and stuck to the same US menu. That meant pizzas topped with red meats like pork and beef — items most Indians either don’t eat for cultural or religious reasons. Domino’s, meanwhile, had quickly realised that winning here meant bending to Indian tastes, not the other way around.

Papa John’s also priced itself higher. But this was the era when India’s millennials — the first generation to spend a significant chunk of their food budgets, nearly 10% compared to just 3% for their parents — were discovering cheap Domino’s pizzas. Domino’s quickly became the go-to comfort food, while Papa John’s was seen as the overpriced outsider.

And then there was expansion. By 2017, Papa John’s had only 66 stores in 11 cities, while Domino’s had over 1,000 outlets across more than 200 cities. It aggressively moved into Tier-2 and Tier-3 towns, becoming the first international food chain in many smaller places. Add to that its famous “30 minutes or free” delivery and consistent customer service, and Domino’s locked in loyalty across the board.

Put all this together, and you’ll see why Papa John’s simply couldn’t keep up. With a weak strategy, slow expansion and managerial missteps, it was forced to bow out.

And fast forward to today, things have changed even more. Domino’s has ballooned to over 2,240 outlets in India. Its nearest competitor, Pizza Hut, has less than half that number. And now, regional pizza chains have muscled their way in too, grabbing nearly 30% of India’s organised pizza market. India’s La Pinoz Pizza is even trying to take on the American giants at a national level.

In other words, competition is tougher than ever. And conditions aren’t exactly favourable either. Discretionary spending has slowed, with India’s middle class saving less. Input costs for QSRs have gone up. And the price wars sparked by food delivery platforms offering steep discounts have further squeezed margins.

Even Domino’s isn’t immune. When Papa John’s left India, its operating margin was just 4.6%, compared to Domino’s 9.7%. Today, Domino’s revenues are growing in double digits most years, and its operating margins have doubled to around 19%. But its net profit margins have actually fallen from 4.8% to 3.2%, over the last decade. Thanks to rising costs like rent and staff salaries. In short, even the market leader is struggling to protect its bottom line. So for Papa John’s, entering this battlefield will be anything but easy.

Which brings us back to the question: why bother coming back?

Well, maybe Papa John’s has been swept up by the “escape competition effect”. 

To understand what that means, imagine a race where runners are shoulder-to-shoulder. The pressure doesn’t make them drop out. Rather, it pushes them to run harder and find new techniques to win.

Businesses often work the same way. Intense competition can force companies to up their game, adopt new models or simply do things better. And perhaps Papa John’s sees India not as a hopelessly saturated market, but as a place where innovation could give it an edge.

And the lure is obvious. India’s pizza market is already worth ₹15,000 crores and is growing at 9.3% annually. The country has a massive, young population and pizza penetration is still low compared to other global markets. Which means there’s plenty of headroom for growth. The pie itself is getting bigger, even if Domino’s still hogs most of it.

Plus, this time, Papa John’s is also entering with a new partner — PJP Investments Group, backed by Dubai-based Levant Capital. PJP already operates over 100 Papa John’s outlets across the UAE, Saudi Arabia and Jordan. In other words, they’ve got experience adapting the brand outside the US and dealing with diverse consumer bases. That might just help them avoid the mistakes of the past.

And maybe that’s what it’ll take — knowing what not to do. Sure, it might sound like Papa John’s will have to copy Domino’s or Pizza Hut, but if it wants to compete, it can’t just copy-paste. Instead, it’ll have to carve out its own niche and offer something unique, just like its tagline: “Better Ingredients. Better Pizza”.

Until next time…

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