Knowing China through Taiwan

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Localization key to Yum! Brands' success in China

  • Staff Reporter
  • 2012-03-16
  • 08:47 (GMT+8)
A Pizza Hut in Lanzhou, Gansu province. Yum! Brands has 600 outlets in China. (File photo/Xinhua)

A Pizza Hut in Lanzhou, Gansu province. Yum! Brands has 600 outlets in China. (File photo/Xinhua)

Yum! Brands, the American restaurant giant that owns Pizza Hut, Taco Bell and KFC, has had the most success of any multinational restaurant group in the challenging Chinese market, where palates and preferences frequently differ from other countries.

Citing the group's 2011 financial report released on Feb. 7, 44.4% of the group's US$12.6 billion reported revenue for last year came from the Chinese market, reported the Beijing-based monthly Business Times. One day after disclosing its 2011 report, Gao Yao, general manager of the group's Chinese division, announced the opening of its 600th Chinese outlet in Sanya in the southern Chinese island province of Hainan.

The monthly saw this as a milestone in the group's development in the country. It took Yum! 13 years to expand its presence in China from one to 100 outlets since its entry into the country in 1990.

The pace has picked up since then. The group opened 115 new restaurants in China in 2011 alone and is planning to open another 150 stores this year, said Su Jingshi, CEO of the China division.

"Expanding the number of outlets is one of the ways to widen our lead over our rivals. This policy works because it is in line with the country's rapid urbanization," Gao Yao said. He also said the success of his group has been due to its policy of adapting itself to the Chinese market and its persistent efforts to meet consumer demands.

Su Jingshi attributed his group's success in China to its creation of "leisure restaurants" — a middle ground between fast food and high-end eateries — which appeal to young people in the country.

Innovation is another key to the group's success, said the Business Times.

"Beginning in 2008, we have renewed our menu twice a year, replacing 25% of the foods with new items each time," revealed Gao.

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