Dodo in 2019: 141 new units, $314m in system sales, 46% growth
21 January 2020
In 2019, Dodo Pizza launched 141 new pizzerias and closed 5, capping off the year with 576 units in 13 countries. Outlets outside of Russia generated 11.4% of total revenue, up from 9.5% a year before. Our annual system sales exceeded 20.2 billion rubles—around $314m. In US dollars, that’s a 46% year-over-year growth in sales. Building at such a pace, Dodo remains one of the fastest-growing QSR brands in the world.
Let’s take a quick look at our most significant achievements and some of the challenges we faced over the past year.
Lagos, Nigeria: the first Dodo in Africa
In fall 2018, Dodo Pizza CEO Fyodor Ovchinnikov visited Nigeria for the first time. What he saw there changed his view of the world. Soon afterwards, a decision was made that Dodo would open on the continent in a partnership with Quality Foods Africa. In November 2019, we started delivering in Lagos, Nigeria’s largest city. The launch was an immediate success. This year, we’ll be continuing to grow our presence in the region.
Hangzhou: pizzeria of the future
In spring 2019, we launched our first company-owned pizza shop in China. Well-located in a landmark building in Hangzhou and offering lots of options for the solo diner, the unit aims to achieve the perfect balance between dine-in and delivery sales (which is critical in China, where the delivery market is controlled by aggregators). In 2020, our team will be opening a second pizza shop, improving the format and preparing it for scaling through franchising.
Dodo Pizza UK: new partners and opportunities
Three new franchised Dodo Pizza shops opened in the UK in 2019—in Coventry, Walsall, and Walsall Wood. All of them were launched by our British partners—they turned out to be the first Dodo franchisees who don’t speak Russian and have no ties to our home country. Our goal is to build a chain of 30 pizzerias in the UK by the end of 2021, and not only franchised units. At the end of the year, we secured a location for our first company-owned pizzeria—in the beautiful city of Royal Leamington Spa.
Established shops in Russia: the challenge of further growth
Dodo is Russia’s largest pizza company: twice the size of Domino’s or Papa John’s. With around 400 units already up and running in the country at the beginning of 2019, keeping up the high rate of growth for older pizzerias proved to be tough, especially in a market challenged by negative trends and compared with 2018—the year of the World Cup in Russia. Our YoY order dynamics for units more than 2 years old dropped from 10% at the beginning of 2019 to ‑8% by the mid-summer. We addressed the issue with a new marketing strategy and finally saw +2% YoY growth in December.
See the latest trends and YoY growth data in our monthly financial update
Value for money: combo deals
Our working theory was that one of the reasons for negative YOY dynamics in Russia was the perception of the Dodo brand as an expensive one. Our updated strategy was to offer enticing discounts for returning customers or for larger orders. A key step in bringing this strategy to life was launching a new feature in the Dodo mobile app and on the web. This feature allows customers to customize a combo deal with their choice of pizzas, sides and drinks, and to get a sizeable discount—in just a few clicks.
Conquering Moscow: 139 units
They say there are two countries, actually: one is Russia itself and the other is the city of Moscow. For many years, following a Walmart-like strategy, Dodo was focused on the first “country,” neglecting the second one, which our global competitors considered their turf. Two years ago, we decided to step up our expansion in Russia’s capital. 2019 was a turning point—we finished the year with 138 units in the Moscow region (the capital itself plus its suburbs). Finally, Dodo Pizza started to appear in prime downtown locations of the city of 15 million inhabitants—a huge step for our brand in Russia.
Dodo Pizza Taganskaya: upping the ante
In August, we launched a new company-owned unit near the Taganskaya station in Moscow. Perfectly situated, this pizza shop introduced a range of new hot-and-ready offerings, such as a variety of pizzas by the slice or ready-made dodsters and large pizzas. It’s a blueprint for our growth in the busiest downtown districts across the country. From the get-go, Dodo Taganskaya became one of our top-performing units netting around $20,000 in weekly sales.
World recognition: Bloomberg’s feature story and Award for Innovation
Dodo Pizza—a brand previously well-known mostly in Russia—earned global recognition in 2019. At the Global Restaurant Leadership Conference in Singapore, we received the Distinction Award for Innovation. The chain was also featured by Bloomberg in a rather flattering article. The title: “Russia’s pizza king wants to use the cloud to take over the world.” Not sure about the king thing, but we do use the cloud.
Belarus and Uzbekistan are the fastest-growing
In the CIS and EMEA regions, our sales increased by at least 40%, in some countries—even more. Romania was the only exception with a modest 15% YoY growth rate. Belarus and Uzbekistan top the list of Dodo’s fastest-growing markets.
Coffee and doner kebabs: reaching beyond pizza
At the end of the year, Dodo Pizza founder Fyodor Ovchinnikov opened a new chapter in our history, declaring that the company would launch new brands in the QSR industry, combining our IT solutions with innovative business models and scaling them further through franchising, at first in Russia, then globally. A coffee company and a doner kebab brand will be the first projects to be launched in 2020.