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Celine Sun

More than two decades after taking their first bite into the Chinese market, Western fast-food chains are not resting on their laurels.
From makeovers of premises to revamped menus, the likes of McDonald's and KFC are stepping up their efforts to meet the evolving tastes and lifestyles of Chinese consumers.
And local operators such as Dicos are losing no time in keeping up with the industry pioneers.
KFC, the fried chicken chain owned by global fast-food giant Yum Brands, unveiled its new look for the mainland market last month at one of its restaurants in south Beijing.

	You must push harder if you want to remain a leader in this market

	GARY SHAO, DICOS
Beige walls, modern paintings, wooden chairs and potted plants come together in a design overhaul aimed at creating a relaxing environment. The company defines its new image as "dining room", dispensing with the bold red-and-white colour theme familiar to its customers worldwide.
"This is more like a coffee shop rather than a fast-food restaurant," said Wu Xin, an office worker who ordered a chicken burger for lunch in the newly renovated restaurant.
"I think it's a good idea for KFC to make some changes and give people a different feeling."
KFC, which blazed a trail in bringing Western-style chips and burgers to China with its first restaurant in Beijing's Qianmen commercial area in 1987, has reaped the rewards from its first-mover advantage.
Over the past two decades, tens of millions of urban consumers have taken to the chain's efficient service, standardised menu and templated dining environment - well timed to capitalise on the growth in the mainland's middle class.
The brand has opened almost 4,600 restaurants on the mainland. Dicos, an American-style fried chicken chain controlled by Taiwanese food giant Ting Hsin International, has about 2,200 outlets. McDonald's, the world's No 1 hamburger chain, is next with about 2,000 branches on the mainland.
Despite their market penetration, top fast-food brands have been under mounting pressure in recent years as mainlanders gain more dining options - and an increasing awareness of health and food safety.
"The novelty is wearing off for Chinese consumers," said Shi Jun, a director of Beijing-based consulting firm Alliance PKU Management Consultants.
"Although Western fast-food chains are still expanding aggressively, their market share [on the mainland] is falling. Their rivals are not only Chinese-style fast-food companies but also coffee shops, dessert shops and bakeries."
KFC and McDonald's battled bad press in December 2012 after local media reported a supplier for the market leaders fed poultry with excessive antibiotics. Then an outbreak of H7N9 bird flu on the mainland set panic among chicken consumers.
This resulted in a 15 per cent drop in KFC China's same-store sales for last year, while McDonald's scaled down a shop-opening plan for the year and adopted a conservative pricing strategy.
The top fast-food players are determined to help Chinese regain their appetite for fast food.
KFC, aside from its new restaurant image, unveiled 15 new dishes earlier this year, including Sichuan-style chicken wings.
"[To launch so many new dishes in one go] is unprecedented in KFC's history," said Yum Brands China's chief executive Su Jingshi.
In April, McDonald's opened the first of its "new generation" outlets in Guangzhou. The décor incorporates Chinese elements such as lanterns and abacuses. In December, it revitalised its menu by adding several Chinese-style dishes, like rice topped with meat and fried dough.
The two US-based chains are also changing the way they expand on the mainland. Earlier this year, McDonald's and KFC opened franchises in first-tier cities like Shanghai, Shenzhen and Beijing. Previously, all their outlets were directly managed.
In May, Dicos, a strong force in third-tier and four-tier cities, said it would encourage its outlet managers to open their own franchised shops.
After being acquired by Ting Hsin in 1996, Dicos chose franchising as its main mode of expansion.
"But now it's time to change," said Gary Shao, president of the Dicos business division. "You must push harder if you want to remain a leader in this market."


Fast-food chains reinvent themselves as Chinese tastes evolve

KFC has opened almost 4,600 restaurants on the mainland.

KFC unveiled a new look for its restaurants last month at an outlet in south Beijing. Photo: Celine Sun

Coke's smoggy battle, KFC's 'dead chicken bounce'

Photo: Bloomberg 

KFC works to restore image in China

More bacteria found in Beijing fast-food ice cubes than toilet water

KFC in China has been hit by several food scares and scandals. Photo: Reuters

McDonald's to speed mainland outlet openings

Business

China Business

Western fast-food brands step up efforts to capture bigger share of mainland market


More than two decades after taking their first bite into the Chinese market, Western fast-food chains are not resting on their laurels.


Fast-food chains reinvent themselves as Chinese tastes evolve

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Western fast-food brands step up efforts to capture bigger share of mainland market

Western fast-food brands step up efforts to capture bigger share of mainland market