McDonald’s accelerates China expansion through partnership with property giant Evergrande

McDonald’s has accelerated its localisation strategy in mainland China by entering into a partnership with Evergrande Group, the country’s largest homebuilder.

The agreement comes two weeks after the global fast food giant closed a deal to sell a controlling stake in its Chinese and Hong Kong divisions to China’s state-owned Citic Group.

The newly formed McDonald’s China also unveiled a plan early August to add 2,000 more restaurants to its current 2,500 in mainland China over the next five years in a bid to overtake rival Yum Brands’ KFC chain, which has a bigger share of the mainland market.

“The strategic cooperation with Evergrande will prompt McDonald’s restaurants to quickly expand its footprint throughout the country, especially in third- and fourth-tier cities,” Citic chairman Chang Zhenming said in a statement.

Evergrande will give McDonald’s “priority” in site selection under its property developments nationwide, Citic said.

As middle class Chinese consumers upgrade to more expensive brands and spend more on high-quality food, McDonald’s has turned its sights on consumers in the vast number of smaller mainland cities.