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KFC In China. Watch And Learn.

By Dan Harris on Posted in China Business, Recommended Reading

These are probably my top five unresolved questions, at least for this week. I will be discussing only the last of these in this post.

I truly am fascinated by KFC’s success in China. Though I myself have eaten there only once (with my daughter at an airport), I am in awe of its ability to keep prices down, sell food, open outlets all over China and, perhaps most impressively, consistently maintain a high level of food quality/safety and customer service. How does KFC achieve this? A Harvard Business School article, “HBS Cases: KFC’s Explosive Growth in China, (h/t China Bystander) goes a long way towards answering this. If you are doing business in China or planning to do business in China, I recommend you read this article.

How has KFC managed to do so well in China? Can others duplicate it? Is it too late for another KFC in China? What do you think?

  • allen wan

    KFC is successful because:
    1. it’s selling fried chicken and not hamburger; fried chicken is a global food
    2. KFC is able to cater to Asian tastes by tinkering with the menu a bit like the fried chicken strips with mushroom rice
    3. great pricing and quick service
    4. no fried chicken competition

  • Anon

    “Did Darren Richmond really kill Rosie Larsen?”
    I know! I say no. The season finale really made it look like he’s being set up by political opponents. But, if not him, then who???
    “Why did the U.S. get involved in Libya?”
    Duh! Because we’re violent pseudo-missionary imperialists who have created this smoke screen called “human rights” in order to justify large-scale interference in small, non-white countries, primarily in an endeavor to corner the world’s natural resources and ensure that China remains effectively contained for the foreseeable future.

  • Rick

    I am local Chinese and here are my opinions, despite I am not a fan of KFC.
    1. Big volume, comparing to McDonald’s.
    2. Including some traditional Chinese food and flavor.
    3. Change menu frequently.
    4. More choices.
    5. It really tastes good.

  • Richard Z.

    Yum Brands has been successful for the reasons that you mention. They are obsessed with maintaining the same level of quality and service at all their stores and, unlike so many others, they generally achieve this. I think it is that simple.

  • http://laowaiblog.com laowaiblog

    KFC is not the only foreign fast food brand to succeed in China, but obviously it has been the most successful. One of the main reasons is the love Chinese people share for chicken. It is more difficult than what most western companies would think to penetrate the Chinese market. This is why it has been more difficult for Mcdonalds than it has been for KFC in China. Mcdonalds needs to persuade Chinese people to accept beef, a type of meet that is not as popular as chicken.
    There are more reasons why KFC has been more successful such as marketing, timing and location of KFC stores. But because the Chinese society is still very traditional in its core, the choice to penetrate the Chinese market with a product that accustoms to local tastes will evidently yield better results.
    More about fast food in China: http://laowaiblog.com/supersized-china/

  • Umberto

    KFC does well in China because it is decent and SAFE food at a good price. It’s trusted.

  • Stephanie

    I have been asking myself this question throughout my whole trip in China. Thanks for the HBR source to explain.

  • Austin G

    My theory is that buying a meal from KFC is very similar to the way Chinese buy dinners at sit-down Chinese restaurants. In the same way one may buy a fish plate, a steamed veggie plate, and some MaPoDoFu to share with whole family, so does a customer buy a bucket of chicken and a few sides at KFC.
    This may be a small factor in the overall picture, but it’s definitely something McDonald’s and other fast-food chains can’t figure out how to reproduce.

  • http://www.foarp.blogspot.com FOARP

    Re: Stonehenge -
    1) It’s, like, really, really old, or something.
    2) If you’re a druid/pagan you can party there on the summer solstice. You can also party there on the winter solstice if you like, but it’s a bit too chilly to be engaging in that kind of thing in december.
    But otherwise, don’t bother seeing it, it really isn’t that impressive, plus the main road that runs very near it totally kills the vibe. Photos make it look way better than it is.

  • Bob Walsh

    I have made it my mission in life to put on a straight face, and try to convince as many Chinese as possible that KFC in its original form in the states actually stands for “Kentucky Fried CAT”.

  • Lee Mac

    There’s actually a book on this (http://www.amazon.com/KFC-China-Secret-Recipe-Success/dp/0470823844), written by a former KFC executive in China. It’s a great read, especially when drawing comparisons with McDonalds, which beats KFC almost everywhere else in the world, apart from China.
    The main points I took away were:
    - KFC is better suited to the Chinese market (Chicken is the second most popular meat, after pork/ products like the KFC bucket are better suited to Chinese-style dining/ the Colonel is old and bearded, as are portrayals of many great Chinese men)
    - Better management by culturally Chinese, but western educated people, especially when it comes to marketing strategies
    - Better localisation, of supply chains, of products etc.
    - Perhaps actually better (the book claims, and I agree, that China’s original recipe fried chicken is one of the best of all KFCs in the world, though I am by no means a KFC connoisseur)

  • http://www.brayechi.com Rodrigo Balotin

    I totally I agree with “laowaiblog”. The main reason why KFC is doing better than Mcdonalds is because it sells chicken, period. Chinese people love chicken and don’t share the same feelings for hamburguer or cheese. It’s not about the pricing, the service or even the food safety standards, because seems to me that Mcdonald’s is not that different from KFC in those aspects.
    Mcdonalds is not that much succesful here (although in some areas they seem to be doing pretty well) because it sells hamburguer, that’s their business. Are they willing to change it just to please their chinese consumers? Well, I don’t think so. They might persuade or try to change the chinese food habits but this is a hard task and they should focus their marketing strategies on children who seem to be more interested on hamburguer.

  • ollumi

    All this trusted and safe talk and no mention of the persistent rumors amongst Chinese consumers of KFC bred mutant Chicken with multiple wings? hah.
    Yeah, bull. It’s successful because it went all-in early, and because it’s chicken.

  • China Watcher

    I find it fascinating that everyone seems to be trying to isolate one reason KFC has done so well in China. I think it is because they do such an excellent job on every reason. I see it as a company that is, as they say, operating on all cylinders.