by Fons1 via FlickrIn the midst of many failures, KFC has been one of the best American companies moving into China, argues Shaun Rein, managing director of the China Market Research Group, in the CIB-magazine.
Rein supports largely the positive case made by Warren Liu, in his book on KFC, the fast food company who has been beating world leader
“You get a lot of global leaders like Wal-Mart that just completely fail in China because they bring the same way of thinking and brand positioning that they use in the US to international markets,” admonishes Rein.
This is not true of KFC, which in its Chinese incarnation does not simply offer its traditional price-efficient, functional dining experience. Unlike in the West, in China KFC caters to the “upwardly mobile middle classes,” Rein says, adjusting décor and prices accordingly.
But he has also some critical notes to crack, when it concerns KFC. Some brands of KFC’s mother company Yum also failed in China, like A&W and Taco Bell, offering products like greasy hamburgers and cheese that did not match the Chinese appetite. KFC has been more succesful in convincing the Chinese parents and much less their children:
“Children are not as excited about KFC as they are about McDonald’s, which does a better job of indoctrinating children to want to go to McDonald’s,” says Shaun Rein. “Will KFC be able to handle the younger generation as they get older? I think the answer is yes, but that’s an issue.”
Rein also wonders whether KFC will take a “health kick?” “Chinese consumers care about health, especially younger ones, but is that going to hit [KFC]? I don’t think so, but it’s a concern,” he says. His point is illustrated by Zhang Yina, a waitress who hails from Shenyang in China’s Northeast, “When KFC first entered Northeast China I was a regular customer,” she says. By her own admission no health freak, weight concerns nonetheless played a part. “I think their food is too high-calorie,” she says. “It makes you fat.” Now in her 20s, this hasn’t stopped Zhang eating KFC altogether – but just more like three times a month.