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China Isn’t the Easy Market It Once Was for Fast-Food Chains
Keywords:
Tags: India,
As China's food retail stores landscape has changed with more and better options offered to consumers, they have shifted upscale, especially with the rapid growth of incomes in China in the last decade. With a decline in growth for Yum Brands in China the company has decided to spin off its operations in China into a separate company, in the hope of giving the local company more room to respond to competitive changes in the food retail store business. As Chinese consumers urban disposable income showed rapid growth from 7700 yuan in 2002 to 23,700 in 2015, the market for food retail chains has changed. With this growth came other competitors such as Pizza Express, a UK chain at the higher end with local Chinese partners, and at the lower end Taiwanese competitors Ting Hsin International Group with its Discos fried chicken chain competing with KFC Yum Brands stores. Local Chinese competitors also moved upscale with Xiabuxiabu Catering serving hot pot, for consumers to cook meat and vegetable in broth doing it themselves. Other factors hurt Yum Brands growth and brand respect with the media reporting use of growth hormones and antibiotics by Kentucy fried chicken suppliers in 2012. And a local media report in 2014 saying that a KFC supplier supplied expired meat hurt sales with adecline of 14% in the fiscal 3rd quarter 2015. The opinion for Pizza Hut, a Yum brand has changed from as recently as 2012, with one survey showing a drop from 39% to 25% for consumers who see it as a desirable brand. A Beijing teacher for example now sees Pizza Hut as a cheap option compared to spending 128 yuan or $20 on a better quality pancetta and sun dried tomato pizza. More discriminating Chinese consumers means this trend will continue, and the media constantly looking for flaws in quality standards. As many companies are finding out the Chinese market is not going to be easy for the complacent.
World Consumer Rights Day and China CCTV's 315 broadcast on consumer issues in China
03/15/2013
Dun & Bradstreet, McDonald's, Yum Brands, Carrefour, Apple and VW, are some of the foreign companies that come up for review in the consumer rights broadcasts of CCTV. There is a new spirit behind the work of CCTV reporters now that poor service and consumer issues relating to quality of products and contamination in food have been made priorities under the new Jinping-Keqiang administration. China's new leadership is turning its attention to these issues negected in the period of fast growth. Foreign companies operating in China are now expected to maintain the same high standards followed in their home market or come up for review.
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Yum Concedes Missteps in China
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Carrefour of France in Deal to Buy 127 Malls
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KFC's Crisis in China Tests Ingenuity of Man Who Built Brand
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McDonald's Says Its Restaurants Got Too Complicated
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Yum Brands India
03/30/2010
Grouped Articles
Novelty of Mexican Food In India Is a Hit for Yum
Wall Street Journal 03/30/2010
Yum Concedes Missteps in China
Wall Street Journal 10/10/2013
China Isn’t the Easy Market It Once Was for Fast-Food Chains
Wall Street Journal 10/21/2015
How Yum’s Split Will Put More on Investors’ Plates
Wall Street Journal 10/21/2015
Yum Brands performance
03/30/2010
Grouped Articles
China Leaves Sour Taste at Yum Brands
Wall Street Journal 07/09/2013
Novelty of Mexican Food In India Is a Hit for Yum
Wall Street Journal 03/30/2010
Yum Concedes Missteps in China
Wall Street Journal 10/10/2013
KFC's Crisis in China Tests Ingenuity of Man Who Built Brand
Wall Street Journal 01/14/2014
Yum Brands Sets Plan for Transition at Taco Bell
New York Times 05/20/2014
Yum Brands to Split Off China Business
Wall Street Journal 10/21/2015
Yum Brands response to the decline of its once booming brands in China's market, with Chinese consumers preferring healthier or upscale options
10/21/2015
Yum Brands decides to spinoff its China operations in the hope of responding quicker to changes in the local market. The earlier novelty of its KFC and Pizza Hut stores is fading in a now more developed Chinese consumer market with discriminating consumers looking for better alternatives and competition locally.
Grouped Articles
China Isn’t the Easy Market It Once Was for Fast-Food Chains
Wall Street Journal 10/21/2015
How Yum’s Split Will Put More on Investors’ Plates
Wall Street Journal 10/21/2015
McDonald’s, Pizza Hut Cook Up New Plans for India
Wall Street Journal 03/22/2016
Yum Brands China
02/21/2012
Grouped Articles
China Leaves Sour Taste at Yum Brands
Wall Street Journal 07/09/2013
Yum Concedes Missteps in China
Wall Street Journal 10/10/2013
KFC's Crisis in China Tests Ingenuity of Man Who Built Brand
Wall Street Journal 01/14/2014
Yum Brands to Split Off China Business
Wall Street Journal 10/21/2015
China Isn’t the Easy Market It Once Was for Fast-Food Chains
Wall Street Journal 10/21/2015
How Yum’s Split Will Put More on Investors’ Plates
Wall Street Journal 10/21/2015
Yum Brands management
02/21/2012
Grouped Articles
China Leaves Sour Taste at Yum Brands
Wall Street Journal 07/09/2013
Yum Concedes Missteps in China
Wall Street Journal 10/10/2013
KFC's Crisis in China Tests Ingenuity of Man Who Built Brand
Wall Street Journal 01/14/2014
Yum Brands Sets Plan for Transition at Taco Bell
New York Times 05/20/2014
China Isn’t the Easy Market It Once Was for Fast-Food Chains
Wall Street Journal 10/21/2015
How Yum’s Split Will Put More on Investors’ Plates
Wall Street Journal 10/21/2015
Yum Brands strategies
03/30/2010
Grouped Articles
China Leaves Sour Taste at Yum Brands
Wall Street Journal 07/09/2013
Novelty of Mexican Food In India Is a Hit for Yum
Wall Street Journal 03/30/2010
Yum Concedes Missteps in China
Wall Street Journal 10/10/2013
KFC's Crisis in China Tests Ingenuity of Man Who Built Brand
Wall Street Journal 01/14/2014
Yum Brands Sets Plan for Transition at Taco Bell
New York Times 05/20/2014
Yum Brands to Split Off China Business
Wall Street Journal 10/21/2015
The Chinese market in 2015 and pitfalls for Yum Brands and its KFC, Pizza Hut stores in China
10/21/2015
Rapid growth and then a public scare with media reports of falling quality standards hurt KFC outlets. Local Chinese and Taiwanese brands offer more options at the higher and lower ends of the price range. Other European competitors partnering with local Chinese companies offer better value and quality upscale hurting Pizza Hut stores. And suddenly the whole landscape has changed for Yum Brands in China. It shows the Chinese market is no place for the complacent, that the discriminating tastes of consumers and search for healthier alternatives is taking place in China, India and other developing countries, just as much as it is in the U.S.
Linked Articles
China Isn’t the Easy Market It Once Was for Fast-Food Chains
Wall Street Journal 10/21/2015
Yum Brands to Split Off China Business
Wall Street Journal 10/21/2015
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