KFC in China

KFC is a fast food restaurant chain that specializes in fried chicken and is China's largest restaurant chain. KFC restaurants in China are owned or franchised by Yum China, a restaurant company that also owns the Pizza Hut and Taco Bell chains in China and was spun off from Yum! Brands in 2016.

Kentucky Fried Chicken
TypeSubsidiary
IndustryRestaurants
GenreFast food restaurant
Founded
FounderHarland Sanders
Headquarters1441 Gardiner Lane
Louisville, Kentucky, U.S.
Number of locations
5,910 (2018)
Key people
Products
RevenueUS$23 billion (2013)[2]
ParentYum China
Websitewww.yumchina.com/en/Brand/KFC
www.kfc.com.cn/kfccda/index.aspx
(Chinese KFC website)

KFC has more than 6,600 outlets in China as of March 2020.[3]

According to research by Millward Brown, KFC was the most powerful foreign brand in China in 2013.[4]

KFC drive through restaurant in Qingdao

History

KFC became the first Western fast food company in China after its first outlet opened in Qianmen, Beijing, in November 1987.[5] The operation was a joint venture, with a 60 percent stake held by KFC, 27 percent by the Beijing Tourist Bureau and 13 percent by Beijing Food Production.[6] In early 1988, Bank of China took a 25 percent stake in the venture, and KFC's original stake was diluted to 51 percent.[6]

Warren Liu, a former vice-president of Tricon Global Restaurants (KFC's former parent company) argued that, "being the first ... has continued to provide KFC with a substantial competitive advantage."[5] By 1988 the Beijing outlet had the highest volume sales of any KFC in the world.[6]

Instead of importing American managers, KFC hired management from rising Asian economies such as Taiwan.[5] Existing Chinese distribution infrastructure was poor or non-existent, so KFC created its own, which ensured high quality standards.[7] The chain had an early advantage against its Western fast food rivals, as fried chicken has been a staple Chinese dish since antiquity, whereas hamburgers were foreign and relatively unknown.[8]

By 1994, there were 28 KFC outlets in China, including seven in Beijing.[9] By 1997, there were 100 outlets.[10]

In 2008, CEO David Novak announced plans to open more than 20,000 restaurants in China, saying: "We're in the first innings of a nine-innings ball game in China."[11]

At the start of 2008, the chain added its first Chinese street food snack to its menu, the youtiao.[12] The street snack menu was expanded in 2010 with the addition of the shaobing.[12] In August 2010, KFC China announced its biggest product launch to date: the Rice Bowl, which heralded the arrival of rice as an accompaniment across the chain.[12]

2012-14 supply issues

In December 2012, the chain faced allegations that some of its suppliers injected antiviral drugs and growth hormones into poultry in ways that violated food safety regulations.[13] This resulted in the chain severing its relationship with 100 suppliers, and agreeing to "actively co-operate" with a government investigation into its use of antibiotics.[5]

KFC China sales in January 2013 were down 41 percent against the previous year.[14] In May 2013, Businessweek speculated that KFC may be "losing its touch" in China.[15] Recovery has been slower than Yum! expected, with same store sales continuing to decline as late as October 2013, although the rate of decline is slowing.[16] Leslie Patton of Businessweek also highlighted increased competition in the fast food category from competitors.[16] To counter sluggish sales, the menu was revamped in 2014.[17] In April 2014, Yum! announced that first quarter KFC sales had risen by 11 percent in China, following a 15 percent fall in 2013.[18]

In July 2014, Chinese authorities closed down the Shanghai operations of the OSI Group, amidst allegations that it had supplied KFC with expired meat.[19] Yum! immediately terminated its contract with the supplier, and stated that the revelation had led to a "significant [and] negative" decline in sales.[20]

Operations

Sam Su is chairman and CEO of Yum!'s Chinese operations.[21]

The Zinger burger is the highest selling menu item.[22] KFC has adapted its menu to suit local tastes, with items such as rice congee, egg custard tarts and tree fungus salad, with an average of 50 different menu items per store.[5][11] Another item is the Dragon Twister, a wrap that includes fried chicken, cucumbers, scallions, and duck sauce,[23] similar in preparation to Peking duck.

Chinese outlets are typically two to three times larger than American and European outlets; many are open 24 hours a day and provide home delivery; and two new menu items are released each month.[10] 78 percent of Chinese sites are company-owned, compared to 11 percent internationally.[24]

Current items on the KFC menu sold in China as of 2020 according to kfc.com.cn are listed below:

Burgers
  • Crispy Chicken Bafen Burger (脆鸡八分堡）
  • Zinger Burger (香辣鸡腿堡)
  • Extra Tasty Crispy Burger (劲脆鸡腿堡）
  • New Orleans Roasted Burger (新奥尔良烤鸡腿堡)
  • Bacon Chicken Burger (培根烤鸡腿堡)
  • BBQ Pulled Pork Burger (BBQ手撕猪肉堡)
  • Chicken & Shrimp Burger with Honey Mustard (伴鸡伴虾堡)

Twisters
Dragon Twister sold from a KFC restaurant in Beijing
  • Dragon Twister (老北京鸡肉卷)

Rice
  • Hot Spicy Chicken Rice (香辣鸡柳饭）
  • New Orleans Roasted Rice (新奥尔良烤鸡腿级）
  • Teriyaki Chicken Chop Rice (香烤照鸡腿级）

Snacks
  • Original Recipe Chicken (吮指原味鸡）
  • Hot Wings (香辣鸡翅) (2 pieces)
  • New Orleans Roasted Wings (新奥尔良烤翅) (2 pieces)
  • Thai Spicy Roaster Wings (泰式香辣烤翅）(2 pieces)
  • Chicken Nuggets (黄金鸡块) (5 pieces)
  • Popcorn chicken (劲爆鸡米花) (small and large)
  • French Fries (薯条) (small, medium and large)
  • Spicy Squid (辣小鲜鱿)
  • Flesh&Bone (骨肉相连)

Selected Catering
  • Egg & Vegetable Soup (芙蓉会疏汤)
  • Mushroom Soup (菌菇四宝汤)
  • Corn Cob (香甜栗米棒)
  • Corn Salad (玉米沙拉）
  • Mashed Potato (士豆泥）

Desserts and Drinks
  • Oreo Floral Ice Cream (奥利奥花淇淋)
  • Taro Ball Floral Ice Cream (芋缘花淇淋)
  • Red Bean Pie (红豆派)
  • Portuguese Egg Tarts (葡式蛋挞) (classic)
  • Sundae (圣代) (chocolate and strawberry)
  • Ice Cream Cone (脆皮甜筒)
  • Pepsi Cola (百事可乐)
  • Sparkling Apple Juice Drink (苹果气泡果汁饮料)
  • 9 Lives Juice Drink (九珍果汁饮料)
  • Ice Cream Float Coffee (雪顶咖啡)
  • Classic Milk Tea (香醇奶茶）(hot and iced)
  • Milk Tea with Red Bean and Stuffed Pearls (红豆圆奶茶）(iced)
  • Soy Milk (醇豆浆）
  • Hot Milk (热牛奶)
  • Classic Coffee (经典咖啡）
  • Americano (美式) (hot and iced)
  • Latte (拿铁) (hot and iced)
  • Cappuccino (卡布奇诺) (hot)
  • Mocha (摩卡) (hot)

Notes

    References
    1. "Yum! Brands: Senior Officers". Yum! Brands. Retrieved 8 September 2013.
    2. Iconic Global Brand (PDF). Louisville: Yum! Brands. 2014. p. 98. Retrieved 1 September 2016.
    3. "百胜中国旗下品牌-肯德基". 百盛中国.
    4. Walshe, Peter (23 July 2013). "Top 20 foreign brands in China". Retrieved 5 April 2014.
    5. Kaiman, Jonathan (January 4, 2012). "China's fast-food pioneer struggles to keep customers saying 'YUM!'". The Guardian. Retrieved January 4, 2012.
    6. Paul W. Beamish; J. Peter Killing (1 January 1997). Cooperative Strategies: European Perspectives. Lexington Books. p. 117. ISBN 978-0-7879-0815-7.
    7. David E. Bell; Mary L. Shelman (November 2011). "KFC's Radical Approach To China". Harvard Business Review. Retrieved January 31, 2013.
    8. David L. Kurtz; Louis E. Boone (January 9, 2008). Contemporary Business: 2009. Cengage Learning. p. 389. ISBN 978-0-324-65384-7. Retrieved March 28, 2013.
    9. Jing, Jun (2000). Feeding China's Little Emperors: Food, Children, and Social Change. Stanford University Press. p. 117. ISBN 978-0-8047-3134-8. Retrieved September 27, 2013.
    10. Silverstein, Michael J.; Singhi, Abheek; Liao, Carol; Michael, David (September 11, 2012). The $10 Trillion Dollar Prize: Captivating the Newly Affluent in China and India. Harvard Business Press. pp. 126–8. ISBN 978-1-4221-8706-7. Retrieved January 28, 2013.
    11. Shen, Samuel (May 5, 2008). "Kentucky Fried Chicken banks on China". New York Times. Retrieved September 11, 2012.
    12. Thorniley, Tessa. "KFC in China: How a US giant created a 'local' brand". WARC.
    13. Waldmeir, Patti (December 20, 2012). "Yum investigates poultry allegations". Financial Times.
    14. Coonan, Clifford (February 12, 2013). "Scare takes bite out of KFC's sales". Irish Times. Archived from the original on February 13, 2013. Retrieved February 12, 2013.
    15. Lin, Liza; Patton, Leslie (May 16, 2013). "KFC Loses Its Touch in China, Its Biggest Overseas Market". Businessweek. Retrieved September 27, 2013.
    16. Patton, Leslie (November 13, 2013). "Yum's China Sales Fall Less Than Estimated as KFC Decline Slows". Businessweek. Retrieved November 13, 2013.
    17. Wong, Venessa (March 27, 2014). "To Start Fresh in China, KFC Goes for a Menu Makeover". Businessweek. Retrieved March 28, 2014.
    18. "KFC owner Yum Brands' profit boosted by China recovery". BBC News. April 23, 2014. Retrieved April 23, 2014.
    19. Hornby, Lucy (July 21, 2014). "McDonald's and KFC hit by China food safety scandal". Financial Times. Retrieved August 22, 2014.
    20. Ramakrishnan, Sruthi (July 30, 2014). "Yum says China food safety scare hurting KFC, Pizza Hut sales". Reuters. Retrieved August 22, 2014.
    21. "Yum! Brands: Senior Officers". Yum! Brands. Retrieved September 8, 2013.
    22. Speaker Series: David C. Novak on YouTube
    23. Wolf, Barney (May 2012). "David Novak's Global Vision". QSR Magazine. Archived from the original on March 9, 2014. Retrieved March 12, 2013.
    24. Yum! Annual Report 2013 (PDF). Louisville: Yum! Brands.

    Further reading
    • Warren Liu. KFC: Secret Recipe for Success. Wiley. 26 September 2008.
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