Rejection of McDonald's Adherence to KFC in China

In the afternoon of November 10th, when Wang Jia, a college student, was savoring the taste of new rose roast wings at KFC in the Zhongguancun Culture Commercial Building in Haidian District, the foreigner who smiled at his face before the smile was just giving the KFC MBA students a lesson. How to Succeed Lectures David Novak, Global President, Umno Global Catering Group, USA.

Although KFC is well-known in Chinese countries, its parent company, Yum! Group, kept its low profile as much as possible, so that the visit of the global president was not revealed at all. In two days, David Novak scrutinized the development report of the Chinese market in detail and visited the Yum Chinese fast food restaurant “Eastern White” in Xujiahui.

Now, the Chinese market is the largest market except the U.S. market, accounting for 50% of the U.S. revenue. In 2005, China’s sales reached 13.3 billion yuan, which is the fastest growing region in the world. In the third quarter of this year, Yum! China’s business unit grew by 26%; in mainland China, KFC expanded at a rate of 18% at the speed of opening a new store every day.

"China is the best market for development. We want to let the world share China's experience." David Novak is less interested in the schedule of the eye-catching three-man basketball game in the KFC restaurant in Beijing. "This event is Chinese original." , is being promoted to other areas." David Novak explained.

The old Beijing chicken rolls that are deeply loved by Chinese consumers have already appeared in KFC restaurants in other Asian countries such as Indonesia, Malaysia and Japan. Now, the Chinese market has not only existed as a branch of the global market, it has even become a provider of successful experience.

Fully open the gap

The Chinese market has become increasingly successful, and Yum!’s appetite has also exploded. “The key business operations of Yum! in China are identified as four blocks. KFC, Pizza Hut, Betshu Express, and Oriental are both white. Our goal is to achieve the best in each area.”

In the Chinese market, KFC is undoubtedly the largest and fastest growing fast food chain. McDonald's has more than 30,000 chain stores worldwide, with total sales of US$40.6 billion. However, there are only 775 stores in China and KFC's 13,000 stores worldwide, but there are more than 1,700 stores in China.

“The plan in China next year is to further infiltrate the community and add 400 more stores, accounting for 40% of the global increase. Eventually, the total number of stores owned by Baixun in the Chinese market will reach 14,000,” said David Novak. We are going to exceed the number of McDonald's stores in the US McDonald's is 14,000 stores in the United States."

It sounded like a joke, but David Novak used the data to prove the feasibility. The international department of Yum! Brands, which is in charge of international business outside of the U.S. and Chinese markets, has 12,000 stores serving 4 billion people. China has 2,000 stores and serves 1.3 billion people. "The room for growth is too great."

As a catering company, Yum!

Pizza Hut was positioned as the first casual dining and eventually reached 2,000, targeting China’s 200 million middle class, which means that it is almost 10 times more than the current 230.

"Home delivery as a derivative brand of Pizza Hut has become the first professional food delivery brand to reach 5,000." The home delivery in Shanghai in 2001 has now expanded to five major cities such as Beijing, Shanghai, Shenzhen, Guangzhou and Hangzhou.

The biggest challenge came from Dongfang Baibai, the first Chinese fast food brand owned by Yum! and settled in Shanghai two years ago. It was questioned due to lack of experience and there are still only four stores. However, David Novak is still full of expectations. In the East White restaurant, David Novak even found his favorite, eggplant noodles. "We want to be the first Chinese fast food, first we must find a successful model, and then promote it."

KFC's development trajectory can prove this cautious truth. From 2001 to 2001 in China, Yum! expanded the number of KFC restaurants to 500 for 14 years; the second 500 took less than 3 years; in October of last year, KFC celebrated. The 1500th restaurant, the third 500 home for about a year and a half, has more than 1,700 KFC stores in the mainland. "The pattern can only be developed quickly."

Adhere to China

Although Dongfang Baibai’s contribution to Yum’s profits is negligible, Yum’s intentions for China are evident. “As an international brand, establishing a local catering brand abroad, Yum! is the first one and the Chinese market may be the only one.” Hu Shuguang, a professor at the School of Economics at Renmin University of China, believes that this is a reflection of KFC’s particularity in the Chinese market. Understand and value.

Now, the image of KFC has been fundamentally changed in China. In order to get rid of the outside world's unhealthy attacks on foreign fast food, KFC is redefining new fast foods. Unhealthy fried foods have only a few products such as spicy chicken wings. Instead, they replace them. Many varieties of products with various cooking methods are used to cater to Chinese people's habits of eating vegetables and soups, and various vegetable salads and vegetable soups are being promoted.

"KFC's global product ratio is 20% for newly developed local products and 80% for traditional products, but in China, the proportion of new products may already reach 40%. Especially for the nutritional breakfast provided alone, there is no precedent worldwide," said David Novak.

In fact, “There are no more KFCs in the world than China's product categories.” David Novak believes that these nutritious menus constitute the reasons for KFC’s success in China. “This also proves that localized management is correct and local talent is more Clear what the local needs."

Although coming to China is becoming a universally recognized American difference for the company’s US headquarters staff, David Novak insists that “it will not send people from headquarters”.

In 1989, the president of Yum! China, Su Jingyi, first came to the KFC market in KFC’s North Pacific market planning directorship. At the time, there were only four KFC restaurants in China. In 17 years, Su Jingyi and his team became the first team to defeat McDonald's in the global market. During this period, the Westerners of the rival McDonald's China were changed by several Westerners. “Our management team is all Chinese, which is rare in multinational companies.” David Novak introduced.