The giants of western fast-food in China
KFC, the worldwide leader of fast-food chicken, has been present in China since 1987 and owns now more than 4400 restaurants in more than 200 cities. First successful because it was exotic, KFC is now part of the scenery. In the empire of the middle, it is known as 肯德基炸鸡 (Prononcez Kěndéjī Zhájī), which is the exact translation for Kentucky Fried Chicken. KFC makes half of its operating profit.
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It is the most famous western fast-food restaurant in China. To the point that the Chinese group YUm! decided to launch East Dawning, its chain of Chinese chicken specialties, inspired by the American brand.
MacDonald’s opened its first restaurant in China in June 1990 in Shenzhen. Twelve years later, there are more than 1500 restaurants flaunting the big M. A remarkable evolution but still 3 times less than its Kentucky rival. If it was quite successful at first, Chinese people being curious to try the famous hamburger, it has been through some crisis since then…
The famous American fast-food chain’s sales would have been falling by a third in one year. Mac Donald indeed suffers from the fact that it is often associated with junk food and though from the suspicion of the Chinese consumers. And it is especially true in China, where it’s been associated with many food scandals in recent past years. Until 2011, McDonald’s was still opening one restaurant per day in China. But it is not the case anymore. They even announced recently that they would close down 700 restaurants, among which a majority is in China.
A menu dedicated to China
Even in Chinese McDonalds, you can find the classics that made the success of the big M: nuggets, Filet O’fish, Royal Cheese, Mc Chicken… But the group also tried to adapt its menu to the Chinese customers’ taste and offers a Spicy Chicken Burger, red been pie and maize, and Mc Café also has a range of green tea flavored products.
Concerning KFC, it also offers to its Chinese customers rice with mushrooms, soy milk, egg pies, and the special You Tiao (a long doughnut fried in vegetal oil, typical breakfast in China).
In China, KFC and McDonald had to adapt to very price-sensitive consumers. Though, if the parts are smaller, the price is also significantly lower. The Best Of Menu that is sold about 7 euros in Europe, only costs 18 yuan in China, which represent about 2,30 euros!
Price represents an advantage for MacDonald, KFC remains a little more expensive.
An adapted advertising campaign
MacDonald resort to patriotic spirit
Mc Donald also made noticeable efforts to adapt its marketing strategy. Symbols of the greatness of China can be seen on some of its commercials: the great wall, the entrance of the forbidden city, the Jo stadium, the Chinese rocket Shenzhou 7, etc.
The group comes up with a different slogan in every country. In China, it became “When China wins, I love it!” during the JO of Pekin in 2008. MacDonald has understood that nationalism sells. The multinational chain, a symbol of American capitalism, even went as far as offering a special menu to celebrate the Chinese communist party that had been governing for 60 years.
KFC focuses on quality and conviviality
Concerning its marketing strategy, KFC decided to focus on two main aspects Chinese people are very sensitive to the quality of the food, and a convivial atmosphere. They highlight family values in their commercials, values that are essential in a culture based on Confucianism. They use the idea that coming to eat at KFC with your family is the best way to forget the generation gap and just enjoy a good time all together. Though, one of KFC’s advertising in China shows a father singing traditional opera with his son dancing hip-hop.
The brand also focused a lot on kids, who are only children and though kings in China. Indeed, children’s menus are offered, with a toy and a birthday party can be organized in the restaurant. The nutritional qualities are also underlined, Chinese parents being more and more concerned about it.
And just as its rival does, KFC also frequently resorts to Chinese symbols and cultural references in their advertising and decorating the restaurants.
Food security, a sensitive issue
After the serial food scandals China had to deal with within the last years, the question of food security has become a very sensitive one. After the toxic rice, the poisoned milk, the doped pig, and many others, Chinese consumers have become more and more suspicious about concerning the quality of their food.
Western brands used to be said more reliable. Used to. This was before OSI, a retailer of both KFC and McDonald’s, was accused to mix outdated meat with fresh one. Don Thomson, CEO of McDonald declared feeling betrayed but kept on dealing with OSI. While KFC immediately cut off its deal with the incriminated group.
After chicken stuffed with antibiotics were discovered in December 2013 in some of its suppliers’ factories, KFC had to face a drop of 37% of its sales. From this moment, the brand has been making a point at controlling the quality of its products. It even got rid of no less than 1000 of its chicken supplier within the framework of the “Thunder operation”.
Today, KFC has become the clear leader in China among western fast-food restaurants and there is no doubt that it will recover from those adventures.
To know more about the OSI scandal, see this article.
Management of the scandal
It has become essential in the food industry and restaurants to set up a crisis management strategy, especially in China. And in this country where people live connected to the internet almost all the time, the internet is an essential tool. Indeed, Chinese consumers would exchange a lot on social networks about the products they purchases or their experiences. The information spread fast on the Chinese social networks such as Weibo, QQ, and WeChat, and though they have a strong impact on the brand’s e-reputation.
McDonald’s and KFC both understood that and though are very present and active on the Chinese network, which saved them several times from what could have turned into dangerous bad buzz.
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