KFC’s Radical Approach to China (2024)

FAQs

What is KFC's market entry approach in China today? ›

But the strategy that emerged was remarkably clear and embodied five truly radical elements: turning KFC into a brand that would be perceived as part Chinese; expanding rapidly into small and midsize cities; developing a vast logistics and supply chain organization; extensively training employees in customer service; ...

Tailoring the Menu 🍲

KFC won over Chinese consumers by adding local cuisine options like egg tarts, soy milk drinks, and rice porridge. By 1999, KFC had over 300 stores in China, and by 2001, it was Chinese consumers' favorite brand.

Yum! Brands/KFC had the strategic goal of becoming the leading fast food chain in China by leveraging the brand recognition and expertise of KFC to expand its presence. They wanted to capture a large portion of the Chinese fast food market and become the leader in the industry.

Localization is Key: KFC doesn't just sell fried chicken—they sell a taste experience tailored to local preferences. This is a fundamental aspect of KFC's global strategy. In India, for example, KFC offers vegetarian options and flavors that cater to the local palate.

More so, the research also highlights that in order to ensure its sustainability in China, KFC targets all consumers segments, both young and old alike. It has delivered on this by offering a variety of high quality cuisines to fit each group.

The key to KFC's success in China was the way they tailored the menu to local tastes. Chinese KFC has items never to be found in American restaurants. The chain serves not only fried chicken but also many local dishes such as rice porridge or egg tarts.

Such dramatic transformation was driven by the needs of China's youth population, a market of over 225 million people who simply weren't connecting with the chain in recent years.

Yum! operates the brands KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill, except in China, where the brands are operated by a separate company, Yum China. Yum! previously also owned Long John Silver's and A&W Restaurants.

KFC's competitive strategy leverages differentiation and market penetration to maintain its position in the fast-food industry. The brand differentiates itself with its unique secret blend of 11 herbs and spices, high-quality ingredients, and distinct taste that sets it apart from competitors.

In China, the fast-food brand KFC - operated by Yum China in the country - generated over 8.2 billion U.S. dollars in revenue in 2023, an increase of approximately 14 percent compared to the previous year.

Why is Yum brands successful in China? ›

KFC and Pizza Hut collectively contribute over 95% of Yum China's revenue, and establish the group as a dominant force in China's F&B industry. Yum China's success lies in smartly localizing its menu, blending Western fast-food concepts with Chinese characteristics, catering to diverse regional tastes.

A Finger-Lickin' Faux Pas

In the 1980s, KFC translated its iconic slogan into Mandarin to appeal to the Chinese market. But this attempt resulted in a phrase that sounded less than delicious. “Finger-lickin' good” became something more like “Eat your fingers off.”

In its home country, KFC has evolved with the American palate. The original recipe remains a staple, but localized items cater to diverse tastes. Limited-time offerings tied to American cultural events ensure a continual connection with the local audience.

KFC's unique selling proposition is its unique blend of 11 herbs and spices. The company's branding emphasized the fact that its chicken is made with a special recipe that makes it taste better than other fast food chicken.

KFC uses few entry strategies when entering in to new global markets. Usually KFC explore market entry strategies such as fully owned subsidiary, franchise or joint ventures depending on trade barriers, local regulations, cultural aspect of the new market and the market environment.

The KFC marketing strategy primarily includes SEO, content marketing, email marketing, social media marketing, and video marketing. However, the company pays special attention to social media marketing and uses the most popular digital marketing platforms to highlight its price and customer satisfaction.

Market share of leading fast food brand restaurants in China 2016-2022. In 2022, KFC continued to be the leading restaurant brand in the limited-service restaurant market in China, with approximately 5.5 percent of the market share. McDonald's and Dicos were another two major market players that year.

KFC's competitive strategy leverages differentiation and market penetration to maintain its position in the fast-food industry. The brand differentiates itself with its unique secret blend of 11 herbs and spices, high-quality ingredients, and distinct taste that sets it apart from competitors.