Case study
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KFC was the first American fast food chain to enter China in 1987, opening a large restaurant near Tiananmen Square in Beijing. The restaurant was an immediate success, with long lines stretching for months. Over the next few decades, KFC expanded rapidly across China and now has over 5,000 restaurants, doubling the market share of its closest competitor McDonald's. KFC has retained its dominance in China by adapting to the local culture and tastes, such as offering Chinese breakfast foods and local favorites alongside its classic fried chicken. More recently, KFC has focused on capturing younger consumers through celebrity endorsements of new products and high-tech restaurant concepts.
Case study
- 1. How KFC Became Chinas Fast Food of Choice Cultural Facts With its original restaurant located just a stones throw from Tiananmen Square in Beijing, KFC became the first American fast-food to set foot in China, all the way back in 1987. The three-story branch, with room for up to 500 diners, was KFCs largest at the time, and the grandiosity of this move set the tone for the success the chain would find in China over the next few decades.
- 2. KFC in China As the first window into American-style dining for many, KFC was an immediate hit, with lines stretching for blocks even months after the branch opened its doors. A year later, the Beijing restaurant was still going strong, outperforming all other KFCs in the entire world. To this day, KFC reigns supreme in China, its 5,000-plus restaurants doubling the market share of its closest competitor McDonalds.
- 3. KFC has retained its hold on the Chinese market through a continued willingness to adapt to the unique conditions of the country. In many ways, KFC allows the context of China to inform and direct not only its marketing strategies, but the overall administration of the company. In 2016, KFCs parent company Yum Brands spun its China operations off into Yum China, a wholly separate entity. By putting its success in the hands of local executives, KFC empowered itself to thrive thanks to the practical experience and insights of these leaders.
- 4. At first, KFCs success could be largely attributed to novelty. It was a western food chain selling western food, but at the same time, fried chicken was already known to Chinese eaters. The chains first-mover advantage combined with its new-yet-familiar product worked fantastically, and though KFCs prices were higher than local options, this was often interpreted as a sign of quality.
- 5. Gradually KFC began to seed its menu with increasingly Chinese-styled options. Now, the chain boasts a full Chinese breakfast menu alongside fish and shrimp burgers, vegetable soups and full-plate meals with vegetable sides. Given KFCs shift to a dine-in experience, this menu variety caters to local tastes while offering enough variety to encourage repeat visits. Still, despite all the Chinese options on the menu, the trusty Zinger chicken burger remains the countrys favorite.
- 6. In recent years, Yum China president and COO Joey Wat has led the company through an aggressive push to capture Chinas millennial consumers known domestically as the post-90s generation. After a spot of low performance in 2012-13 triggered by a food safety scare, KFCs sales were slow to rebound to prior levels. Since Wats tenure began in 2016, KFC has embarked on a relentless campaign, reinventing its brand as a trendy connoisseur of millennial Chinese culture.
- 7. Chief amongst Wats strategies has the companys headlong dive into the realm of celebrity endorsements. KFC introduces new products with the aid of hugely popular entertainers including Lu Han, Joker Xue and TFBoys, a three-member boy band with a combined following of over 100 million on Chinese social network Weibo. One of the companys latest campaigns features model Xing Lu in support of the Mojito Girl, a new alcohol-free drink targeted towards younger women.
- 8. In addition to these high-profile cosigners, KFC has also begun experimenting with new dining concepts. In Hangzhou, the company recently opened health- focused restaurant KPRO, which allows diners to order with their mobile devices and pay via the Smile to Pay facial recognition software by Chinese tech giant Alibaba.