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Chinese Fast Food Biography

Source(google.com.pk)
The world’s second-largest burger chain is gearing up in China
Oct 23rd 2008 | BEIJING | From the print edition
Timekeeper
CHINA may boast a 5,000-year-old culinary tradition, but when it comes to fast food, Western-style outlets rule. For this you can thank—or blame—changing consumer tastes, and the breathless expansion plans of chain restaurants, which are eager to grab a bigger slice of the country's estimated annual 200 billion yuan ($29 billion) fast-food market.

For two decades the battle for the modern Chinese stomach was fought between two American giants: McDonald's, the world's largest fast-food chain; and Yum! Brands, which operates the KFC and Pizza Hut brands in China. Yum!, which first arrived in China in 1987 (three years before McDonald's), has always stayed ahead of its rival—going by both the number of restaurants and consumers' awareness of the brand. In 2005 the two titans were joined by another American stalwart, Burger King, the world's second-largest burger chain.

In April Burger King had just 12 outlets on the mainland, including nine in Shanghai. But after this cautious start, the company is pushing ahead with a faster store roll-out: in June it announced plans to open between 250 and 300 outlets in China over the next five years, including another ten restaurants in Shanghai. As in other markets, 90% of them will be franchised and a tenth owned by Burger King. For comparison, KFC has more than 2,200 outlets in some 450 cities and McDonald's has 950 outlets.

Airport eateries will also be vital. Some 200 of Burger King's 11,500 outlets worldwide are at airports. Catering there has a number of advantages, including steady, captive customers and limited competition. In February Burger King opened its first outlet at Beijing Capital Airport's Terminal 3, and the following month it opened two restaurants at Shanghai Pudong International Airport's Terminal 2. Another ten mainland airports are also on its menu.

One problem for Burger King is that its trademark “Whopper” is made out of beef. Like McDonald's, the chain must cope with the fact that Chinese consumers prefer chicken. McDonald's has launched lots of marketing campaigns to try and convince mainland customers about the health benefits of eating beef (apparently, there are some). This has done much to overcome the traditional indifference of Chinese towards beef, probably saving time and money for Burger King's own marketing campaigns.

Burgers with Chinese characteristics

Burger King is also adapting its menu for China. It has added chicken dishes and has also added chili to some of its offerings. It has not localised its China menu as much as its rivals have, however. KFC has gone the furthest in tailoring its menu for Chinese tastes, with offerings ranging from pumpkin porridge and Beijing chicken rolls to the Chinese deep-fried twisted dough sticks (youtiao) on its breakfast menu. McDonald's (and to a lesser extent, KFC) is also ahead of Burger King in making “off-the-menu” innovations. These include “dessert” kiosks selling just sweet pastries and drinks. McDonald's also runs a 24-hour service at 600 outlets.

With its two American rivals so far ahead, is Burger King likely to be successful in China? There should be demand enough for more than two big American fast-food firms here, analysts reckon, and the company has the resources to finance rapid and sustained expansion into mainland cities. Most important, it is strongly motivated. Burger King is keen to build its business outside America. Four-fifths of the new restaurants to open this year will be outside its home turf, and the company aims to double its Asia-Pacific presence to some 1,400 outlets over the next five years.

In China, Burger King's strategy is particularly to chase younger, more individualistic diners in the country's big cities. Its idea is that these restaurant-goers will want to set themselves apart from older family members or colleagues by trying the newcomer. If so, the Whopper—sold in China as huangbao, or “Emperor Burger”—may yet dethrone the Big Mac here.