China: The Waterloo of McDonald’s

Do you know what KFC restaurant is? I think for Japanese maybe they have an impression of it but compared with McDonald’s, it will soon be nothing to speak of. It is not strange as there are 3736 McDonald’s restaurants and only 1,137 KFC restaurants in Japan. Globally, McDonald’s is the world’s largest food and beverage group and the parent of KFC, Yum Brands Inc., is always defeated by McDonald’s in most markets even though it owns many big brands like KFC, Pizza Hut and etc. However, there is one exception, China. Maybe for people in other countries, it is amazing to find there are about 3200 KFC restaurants and it is almost 3 times of McDonald’s. Also KFC takes great advantages of market share. Obviously, McDonald’s met the Waterloo in China. But, why is that? As far as I am concerned, it is a result of the two groups’ different attitudes towards Chinese local food culture.

KFC restaurants in China are selling Chinese style meals sets

Professor Robert mentioned that the way of Hong Kong McDonald’s treating leftovers is actually a kind of mixture and combination of two different cultures. I regard it as a consequence of compromise of foreign culture and local culture. At the beginning, both KFC and McDonald’s came to China holding the same wish to make western food a new significant character in the meals of Chinese. But unfortunately, they underestimated the power of Chinese local food culture. Some Chinese did try to eat western fast food but as the price of Chinese food is furthermore affordable in 1990s, and rice is still the main character on dining-tables of Chinese, the two groups met a very odd situation as a Chinese phrase goes, they ” fail to adapt the local climate ” They had to make changes to survive in this emerging market. The first one started to make changes is KFC. As some Chinese prefer hot food, its first attempt was made to develop the Hot Chicken Burger only for Chinese Market in 1992, which is universally acceptable at that time and still popular now. Through the development of 30 years, now KFC restaurants are even selling Chinese style meals sets (The staple food of the sets are rice) in China. The culture of KFC was shaped by local culture greatly. However, compared with KFC, the localization process of McDonald’s is not that strong, and it chooses to insist on its own developing style in Chinese market. McDonald’s is much “pure” as a western fast food restaurant.

Though reasons for the success of KFC in China actually also include some other factors, I still think its development strategy of localization is the most important one and it does fit the market of China. Chinese fast-food market, as a local practice, retained a sense of agency in the face of global economic forces and even influenced the global forces itself. The cultural impact of McDonald’s is really powerful, but it seems that Chinese food culture owns more tenacious vitality than McDonald’s expected. Cultures are interacting all the time, so we must try to find the balance of it otherwise we will be surely swallowed in the wave of accelerating globalization.

by. John Wang

 Reference

Introduction to KFC in China and Japan

China: http://www.kfc.com.cn/kfccda/About

Japan: http://japan.kfc.co.jp/qa/kfc.html#F02

China: http://career.mcdonalds.com.cn/join/index.aspx?sub=1

Japan: http://www.mcdonalds.co.jp/company/index.html

 

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One thought on “China: The Waterloo of McDonald’s

  1. As I took it for granted that McDonald’s is the most successful fast-food restaurants in the world, I am surprised to know that KFC is more popular than McDonald’s in China.
    I learned two things from your article. One is that multinational corporation whose customer is local people should know needs of local people and what cultural capital is in that society. And, they also should change their business strategy fit in the needs and cultural capital if they want to succeed in that country. The other is that we should be a smart consumer in order not to just accept the products of company without considering, or our part of culture, such as food custom, will be altered, which may lead a crisis to identity of our culture.

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