食品 - Food

食品 - Yummy Yum! China’s Fast Food to Save America

By GCB_China ⋅ Mai 5, 2008 ⋅  Email this post ⋅  Print this post ⋅ Post a comment

As America is facing recession, there is no one better than Colonel Sanders to save the country by offering Pi Dan Congee, egg tarts, Dragon Twisters as ‘menu novelties’ in its over 2,200 China KFC outlets. Yum! Brands Inc, owner of the KFC and Pizza Hut brands, is creating an expansion drive in China that could make the country its biggest source of profit within a decade.

Yum! Brands has realized very early on that it can’t rely on a foreign brand name for growth and must instead adapt to local tastes and lifestyles. “We felt that we could not just copy a model in a foreign country,” Sam Su, the Taiwan-born, US-educated head of Yum’s China division, told a forum in Shanghai late last year. “In a market like China, everyone should try to create new models.”

Yum! has increasingly designed products and services specifically for local consumers. This strategy has had problems as well as opportunities. “It’s a lot more difficult to standardize Chinese food. It’s much easier with hamburgers,” said Shaun Rein, managing director of the China Market Research Group who is also a highly sought after speaker at chinabizspeakers.

Sam Su has successfully transformed Pizza Hut, a business that was languishing in China, into an upscale restaurant chain targeting China’s 250 million middle-class consumers. “Pizza Hut is the cheapest of the cheapest restaurants in the United States, but in China, Pizza Hut is seen as a classy, up-scale place for dining,” Rein said. “Yum has reinvented the Pizza Hut brand in China … They know who’s spending the money.”

Reuters quotes Lucy Wu, deputy head of China’s Chan Store and Franchise Association “Yum! has the right boss in China. Su is Chinese and knows the Chinese market much better than foreigners. His localization strategy is the secret of success.” Instead of copying the KFC model in the United States, Su spent the past two decades re-defining fast-food, which is often associated with unhealthy, junk food in the West.

Yum’s China business is so successful that CEO Novak is now copying the China model to the United States by introducing healthier products in its US outlets, increasing emphasis on breakfast and evening sales and broader menus that include more desserts and beverages. “Let’s learn from our most successful business. Let’s learn from our China Business”, Novak told investors at Yum’s annual shareholder conference in New York.

And surely it doesn’t stop here. Yum! intends to increase its lead and plans to add 425 restaurants in China this year. McDonald’s has said it aims to open at least 125 stores in the country during 2008. Novak envisages eventually having over 20,000 restaurants in China.

Yum’s sales in China grew 12 percent in the first quarter compared with 5 percent in other international destinations and 3 percent in the United States, Reuters reports. Novak has predicted China’s contribution could reach 40 percent by 2017, exceeding 30 percent for the United States. Now that’s a positive outlook and could mean ‘salvation’ for the sluggish business in America!

J-Kungfu (真功夫) and Little Sheep (“小肥羊) Beware! GOLDENCHINABRANDS previously reported about the ambitious brand building activities of these two ‘very local’ fast food chain brands here and here. It looks as Su’s next big goal is to push ahead with a traditional Chinese fast-food chain called East Dawning (Dong Fang Ji Bai)! Yum! has operated 10 East Dawning (东方既白) branches in Shanghai since 2005, and it plans to test Beijing’s market in time for the Olympics.