The Hindu Business Line : KFC: The fast foods king of China

Despite being the inheritors of a proud gastronomic tradition dating back centuries, what really seems to get contemporary Chinese taste buds tickling is a large helping of Kentucky Fried Chicken. Ninety-seven per cent of Chinese mainlanders dine at fast food restaurants, according to a survey conducted by pollsters AC Neilsen last year, six per cent every day.

Thus, even as KFC and McDonald's find themselves struggling in their home market with increasingly health conscious customers in the US turning up their nose at anything deep fried, China has become their salvation.

KFC, clear winner

The clear ruler of China's fast food roost is KFC. It is today the most recognised global brand amongst urban consumers in the mainland, according to AC Neilson's survey.

KFC claims that more than 2 million Chinese eat in its restaurants every day. With 1,700 outlets in the mainland, large pictures of the goateed Colonel Sanders (founder and chief marketing icon of the company) grace 400 cities across every Chinese province, save Tibet.

By contrast, arch-rival McDonald's only has 770 outlets in China.

China success

On October 11, KFC's parent company Yum! Brand's China operations reported that its third-quarter operating profit jumped 26 per cent, to $105 million, on a 28 per cent increase in sales, which touched $445 million.

By contrast in the US, where Yum! has 20,000 restaurants, operating profits rose less than 1 per cent, to $183 million, while sales fell 7 per cent, to $1.3 billion.

For the year, the Louisville-based company says, it now expects worldwide earnings to rise 14 per cent, thanks almost entirely to China, where it opens a new restaurant every 22 hours.

KFC's China success is all the more remarkable, given that for many a foreign company the mainland market has proven to be their Waterloo.

An edge over others

To begin with the restaurant enjoys significant first mover advantages having entered China as far back in 1987, when it set up an outlet just off Tiananmen Square.

At that time many Chinese still wore blue Mao suits and there were no fast-food restaurants anywhere else in the country (McDonald's debuted in Shenzhen in 1990 and opened in Beijing only in 1992).

After a couple of initial teething problems: for example, its advertising slogan "finger-lickin' good" was mistranslated into Chinese characters that meant "eat your fingers off", KFC was able to capitalise on the novelty value represented by western fare and the glamour associated with American lifestyles.

Lifestyle statement

Even today the arrival of a KFC in China's smaller towns is seen as a local event, with extra security guards being pressed into service to manage the huge crowds that invariably gather. A photo taken inside one of the eateries is an essential status symbol and some couples have even hosted their wedding banquets under the benign gaze of Colonel Sanders.

"When my nephew came to visit me in Beijing last week I told him I would treat him for dinner anywhere and he immediately said he wanted KFC," smiles Ms Yu Yang, a journalist who lives in Beijing. She explains that her nephew comes from a town in Sichuan province that does not yet have an American fast food restaurant.

"But he had heard all about KFC from other friends who had been to bigger cities, and so used to feel very left out." Continues Ms Yang, "Chinese love deep fried food which is why KFC is so big here."

Localised menu

A penchant for the fried aside, the restaurant's popularity owes much to efforts in localising the offerings. The menu currently includes a Beijing duck wrap with spring onions and hoisin sauce, as well as bowls of congee (rice gruel) in the mornings.

Moreover, unlike in India, where the hapless Colonel has been attacked by everyone from anti-globalisers to animal rights activists, China has provided a sheltered environment for KFC to grow in. Thus, for example, even at the height of popular anti-American sentiments in 1999, when the Chinese embassy in Belgrade was attacked in a US air raid, KFCs across China continued to do brisk business.

American culture

"When I was in college we often had discussions about how America was the big bad global policeman, but we blamed the American government for that. American culture however, was always attractive to us," explains Ms Yu Yang.

This dichotomous attitude to the US was highlighted when your correspondent gave a lecture on "The media and cultural imperialism," at the China Communications University a few months ago. Following a spirited debate about the hegemonistic character of American culture, an earnest student approached to ask a question. Your correspondent nodded ascent and prepared to parry queries regarding the pernicious influence of Mickey Mouse. Instead, slightly breathless with nervous anticipation the student asked, "Ma'am, sorry to disturb you, but my classmates and I were all wondering: do you prefer KFC or McDonald's?"

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