Pizza Hut and Kentucky Fried Chicken (KFC), the U.S. fast food restaurant chains under Yum! Brands, have enjoyed phenomenal success in China. In the past five years, Yum! China has on average opened more than one new restaurant a day. Now, it has over 3,700 KFCs and more than 760 Pizza Huts across China.
According to analysts, Yum! China’s business, driven by a rapidly growing middle class, will be twice as large as its U.S. business within five years. Already, China accounts for more than 40 percent of Yum! Brands’ global revenue. As Yum! Brands CEO David Novak said, China is the best restaurant growth opportunity of the 21st century.
How did the Kentucky-based restaurant conglomerate succeed in a country that has thousands of years of its own culinary history? One word that summarizes Yum! China’s success is: rebranding.
When they first entered China in the late 1980s, Yum! China management made a conscious decision that it did not want to be seen as a foreign presence in China, but as part of the fabric of the local community. As Sam Su, CEO of Yum! Brands China Division, pointed out, they wanted to take the best ideas from the U.S. fast-food model and adapt them to serve the needs of Chinese consumers.
They re-branded fast food in China as “delicious and safe, high quality and fast, nutritious and balanced, healthy living, and rooted in China.”
For example, Pizza Hut’s Chinese name, “Bi Sheng Ke,” means “Must Succeed Customer” in Chinese. It gives no hint that the restaurant is about pizza. The name resonates well with Chinese, as it implies success and good fortune.
Pizza Hut is positioned totally differently in China than in the U.S. Continue reading