How unashamedly American brands remain the top dogs in China
They may not be everyone’s pick for a grand nosh-up, but you’ve got to give it to KFC and McDonald’s in China. Since KFC opened its first restaurant in China in 1987, and the golden arches appeared three years later, they have successfully navigated a Yangtze River worth of challenging waters. Facing trials that most categories in China face, they have fought off price-focused competitors such as Tastien and their ¥7 ($1) burgers, imitators such as Dicos, and adapted to constantly shifting food and entertainment preferences. They have demonstrated that unashamedly American brands can remain the top dogs in China’s fiercely-contested fast food category.
Despite being overtly American brands, the average Alabamian wouldn’t find much of the menu board at KFC or McDonald’s recognisable in China. 12 years ago when most foreign brands were still just replicating their products and strategies directly from overseas markets, KFC was the pin-up kid for localisation.
KFC built much larger restaurants than in the west, which acted as community spaces. It offered 50 new products a year – unlike fewer than five a year in most markets – including the well-known Chinese staples such as congee (rice porridge). It was one of the first foreign brands to tap into the vast opportunities beyond China’s big, well-known cities and now has over 10,000 restaurants across 1,900 cities in China. And it localised offerings by city, such as adding more spice in Sichuan than Shanghai.
In 2013 KFC’s fortunes in China turned following a contaminated chicken scandal, coupled with it no longer being considered novel or special. McDonald’s path wasn’t much different, with both chains needing to adapt to the local market at a whole new level. They needed to win back the hearts of young Chinese by appearing dynamic and relevant.
This came from being quick to identify trends as well as to deliver well to them. There are dozens of worthy examples, but our favourites include KFC’s 2022 blind box campaign which was so successful, it got shut down and McDonald’s introducing gaming-themed meals and in-game rewards from purchasing promotional meals as a tribute to Chinese consumers love of gaming. They were also very early in identifying the importance of food delivery in China and incorporated their loyalty programs into it.
Underpinning the success, is the restaurants’ commitment to being ahead of the curve in the digital space. Five years ago when Douyin had become the darling of China’s internet, just two foreign brands were on the top-50 brand accounts – KFC and McDonald’s. KFC had doubled down on digital long before that, with more than 160 million daily users of its app, and over two-thirds of orders paid through smartphones. McDonald’s also boasted impressive numbers.
Arguably the most successful and cost effective campaign has been driven by McDonald’s fans online, nudged along by McDonald’s themselves in a case study on how to support user generated content.
China’s online fans are famous for doing things such as paying for hot air balloons over global landmarks to celebrate idols’ birthdays – behaviour that became so obsessive that Beijing had to crack down on it. McDonald’s has tapped into this passionate fan culture.
Diehard fans of McDonald’s call themselves Màimén, a hash tag that has amassed over 416 million views on RED/Xiaohongshu. They have flooded China’s internet with memes, fashion and photo shoots of McDonald’s restaurants and products. One RED user left a note in her order, “I’m a pious Màimén believer. Can I have some crispy fries to try out, please? Màimén, my forever god.” To her surprise, the staff responded to her request with a handwritten note on the receipt, “Of course, my believer. Màimén forever!” and gifted her a free pineapple pie and spicy chicken wings along with the crispy fries. She shared her experience and got 45,000 likes. It has been replicated by Màimén on countless occasions.
McDonald’s response is a thoughtful, but simple, low cost strategy to supercharge its fanbase and loyalty. Almost every consumer that China Skinny speaks to says the same thing; word of mouth is the most authentic and persuasive way to win their hearts. McDonald’s has tapped into this beautifully, by tracking and monitoring fans, and responding to them swiftly, without killing the buzz.
Whilst McDonald’s and KFC can provide many lessons for foreign brands to successfully market in China, it would be amiss not to include local restaurant chains as a source of inspiration. That will have to be another post, but in the meantime check out popular hotpot chain Haidilao who’s gone viral by offering hairwashing and beauty services, and now tufting!
Many categories may not appear to have much in common with processed burgers, chicken and hotpot, but like everything we do at China Skinny, we take lessons from other categories – some which may not be obvious. Contact China Skinny to learn how your marketing strategy can incorporate the best of many different categories, products and brands in China.
