How KFC Won Over China

Summary

KFC has become a dominant fast food brand in China, boasting over 5,600 outlets and nearly $5 billion in revenue by 2017. Its success began in 1987 with the introduction of localized menu items that appealed to Chinese consumers, contrasting sharply with McDonald's less adaptable strategy. Despite recent declines in market share due to food safety concerns, KFC has initiated new strategies through Yum China, focusing on healthier options to attract younger audiences. As it continues to expand, KFC maintains a strong lead over competitors, underscoring its adaptability in a rapidly evolving market.

Takeaways

• 🍗 KFC has established itself as a global fast-food leader, with over 21,000 locations worldwide as of 2017.
• 🇨🇳 KFC's biggest success is in China, where it operates over 5,600 stores, making it the country's largest restaurant chain.
• 💰 In 2017, KFC China generated nearly $5 billion in revenue, showcasing its massive market impact.
• 📅 KFC entered China in 1987, becoming the country's first quick-service restaurant, and quickly gained popularity.
• 🌍 The late 1980s in China saw significant economic and cultural changes that opened the market to foreign investments like KFC.
• 🥡 KFC tailored its menu to include local cuisine, adding items like egg tarts and soy milk, which resonated with Chinese consumers.
• 🏆 By 2001, KFC was the favorite brand among Chinese consumers, surpassing major competitors like McDonald's and Pepsi.
• 🏙️ KFC strategically expanded into smaller cities in China, securing prime real estate before its rivals.
• 📉 Despite its strong presence, KFC's market share in China decreased from 39.7% in 2012 to 31% in 2017.
• 🔄 In response to changing consumer preferences, KFC launched KPro to offer healthier options and is adjusting its marketing strategy.

Q & A

What year did KFC open its first location in China?

KFC opened its first location in China in 1987.

How many KFC restaurants were there worldwide as of 2017?

As of 2017, there were over 21,000 KFC restaurants worldwide.

What was KFC's market share in China in 2012 and how did it change by 2017?

KFC's market share in China was 39.7% in 2012, which decreased to 31% by 2017.

What local menu items did KFC introduce to cater to Chinese consumers?

KFC introduced local cuisine options such as egg tarts, soy milk drinks, fish and shrimp burgers, fried dough sticks, and congee.

How did KFC's expansion strategy differ from that of McDonald's in China?

KFC expanded into smaller cities and secured prime locations before its rivals, while McDonald's did not adjust its menu to local tastes and focused more on being a children's brand.

What was the outcome of KFC's strategy to localize its menu?

KFC's strategy to localize its menu was successful, allowing it to become the favorite brand among Chinese consumers and outperform competitors like McDonald's.

What challenges did KFC face in maintaining its market dominance in China?

KFC faced challenges such as food safety scandals in 2012 and 2014, leading to a decline in market share and requiring the company to rethink its strategies.

What is KPro and why was it created?

KPro is KFC's initiative to adapt to changing consumer preferences in China, focusing on healthier menu options such as fruit juice, quinoa salads, and salmon sandwiches.

What percentage of KFC's sales in China came from mobile payments in the fourth quarter of 2017?

In the fourth quarter of 2017, mobile payments accounted for 57% of KFC's sales in China.

What is KFC's approach to addressing the decline in its market share in China?

KFC is focusing on adapting its menu and business strategies to meet changing consumer wants and needs while continuing to expand its locations in China.