Fast food in China

KFC, also known as 肯德基, experienced extreme success in China, breaking several world records for restaurants in its early years. KFC's first Beijing restaurant opened in November 1987,[7] and its 500 seats made it the biggest fast food restaurant in the world. In 1988, it fried 2,200 chickens daily and earned more than any other KFC location with a turnover of 14 million yuan. KFC opened 28 restaurants across China in 1994, with seven of them located in Beijing.

KFC quickly found that it appealed strongly to children. Chinese parents reported that they had no preference for any particular fast food restaurant and simply let their children choose. As a result, KFC tried to figure out how to appeal to kids even more. One of the first things KFC found was that children were not at all interested in its logo. In 1995, the bearded, elderly European American man that Chinese children found so off-putting was exchanged for a playful cartoon character dubbed "Chicky." Other efforts to entice children included play areas, child-height sinks, smaller furniture and settings for birthday parties, which were a very recent phenomenon in China. All of these improvements helped the company promote itself among children as a ''fun and exciting place to eat''.[8]

The KFC in Dongsi sits across the street from a Chinese fried-chicken restaurant called "Glorious China Chicken." Despite Glorious China Chicken's cheaper prices, larger portions, choices of rice, soup, and vegetables, and draught beer, the KFC consistently has more customers because of one factor: its hygiene. Regardless of the number of people being served, the Chinese KFC employees constantly clean the restaurant and its bathrooms, so it surpasses the vast majority of China's local restaurants in terms of cleanliness. As a result, Chinese people highly favored KFC and began to complain of other restaurants' lack of bathrooms and general untidiness.[9]

KFC's brand identity can be identified as customers' different satisfaction on the brand's property, products, presentations, and publications. By analyzing a questionnaire on basic information of eating at KFC in both United States and China, Chinese consumers generally eat more often at KFC and have a more positive impression on it than American consumers do. Chinese consumers prefer the clean space and earlier opening hours of KFC while Americans favor it for being affordable and being a meal instead of a snack.[10] Besides the satisfaction on brand identity, KFC specifically came up with the unique menu only in China where you can easily get different flavors of rice porridge, deep fried dough sticks, and soy milk in the morning.[11]

KFC's localization strategy helped the brand mitigate political risk and overcome various business-related issues.[12] In 2005, KFC was facing negative backlash over the discovery of a carcinogenic dye in two of its chicken products.[13] While this discovery had the potential of ruining the brand's reputation, KFC still managed to increase its profits while opening hundreds of new stores in China that same year. The company's success has been assigned to its China-specific advertising spend and its expertise on the Chinese market and customer base.[14]

The first McDonald's opened in mainland China in 1990, in the Shenzhen Special Economic Zone. More prominently, the largest McDonald's in the world opened on April 23, 1992, in Beijing. It has 700 seats, 29 cash registers, and served over 40,000 on its opening day. By 1996, 29 McDonald's had opened in Beijing alone. Initially, mainly affluent families ate there to distinguish themselves and as a result McDonald's became a symbol of a new lifestyle of seeking out foreign cultural influences. One of the biggest reasons McDonald's has experienced more success than other fast food restaurants in China is its high standards of hygiene. Beijing media consistently praises McDonald's cleanliness and frames it against the poor hygiene of its competitors.[15]

KFC and Subway in Shanghai

KFC entered China in the late 20th century and McDonald's followed only three years later. By 2018, KFC had 5910 outlets[16] in China, while McDonald's owned only 2700.[17] Based on the data collected of the number of outlets opened in Chinese cities from 1987 to 2007, KFC tends to add 0.39 outlets per year in a city. The rate of new open outlets of McDonald's is about half that of KFC's. However, both chains favor big cities and expanded rapidly after 1999.[18] There have been competitions between KFC and McDonald's since they both entered the market and it usually has a positive impact.[19] The rivalry between them not only expands potential demand for western fast food by getting Chinese customers to try, but also affects the size of the market where it can be easily enlarged. In general, rivals help fast food chains to make better location choices. However, net growth rate of McDonald's has a negative effect on the enlargement of KFC. McDonald's opens new locations in the areas based on KFC's expansion. This impact can be observed more in big cities than small ones. McDonald's takes advantage of KFC on where to expand the business, and KFC benefits from McDonald's by growing customer interest on western fast food.[18]

In the beginning of their businesses in China, McDonald's and KFC represented the elites of western culture to the Chinese locals. This was because McDonald's and KFC established their first restaurants in high-end shopping centers, office areas, and near universities.

As McDonald's and KFC extended their reach to commercial centers and transportation hubs and began to appeal more to pop culture, they extended their reach to young, white-collar and trendy demographics and the fast food enterprises began to appear less foreign to Chinese locals.

The final phase of the spread of fast food in China occurred when McDonald's and KFC stopped targeting universities and urban hot-spots and began expanding outward and focusing on residential areas. McDonald's and KFC also incorporated more Chinese flavors into their food and reduced American symbolism in their restaurants, making their restaurants seem even less foreign to Chinese locals. With this, eating at American fast food restaurants ceased being something Chinese families did on special occasions and became routine for them.[26]

A study conducted by the International Journal of Pediatric Obesity between April and October 2004 compared BMI to fast-food consumption in Chinese children between the ages of 2 and 18 and found that the highest correlation between the two occurred between the ages of 10 and 12. Despite this, they were unable to find very much correlation between fast food and obesity and concluded that increased obesity was largely a result of environment and lifestyle.[27]

A 2005 study by the Obesity Society found that fast-food had not yet spread far enough across China to have resulted in significant rises in obesity. Chinese children generally ate very few meals away from home. While children in urban areas did eat more fast food than those in rural areas, the difference was considerably small.[28]

Chinese children statistically consume less fast food than American children, but are becoming increasingly obese, and it is likely that the influx of fast food in China is a contributing factor, even though it might not be the principle culprit.[29] Of those who frequent Chinese fast food institutions the most, the vast majority do so in groups as a social activity. Fast food restaurants are also a hot-spot for birthday parties or hosting social events, furthering the idea of fast food being primarily a social activity.[30] From this, it is reasonable to assume that the Chinese do not necessarily consume fast food because of the convenience and cheap prices that entice Americans. This idea of fast-food restaurants as an exotic social destination draws youth away from Chinese restaurants, coupled with the increased number of fast-food restaurants near transport hubs, could very well be negatively impacting their health. Recent Chinese domestic food scandals have Chinese customers shying away from domestic food, leading to a belief that Western brands hold a higher standard and thus making Western fast food increasingly popular within urban cities.[31]

A study published in 2016 connects the expanding number of Western fast food enterprises in China to rising rates of obesity. Fast food industry revenue in China grew over 600% from 2000 to 2012, accumulating over 94 billion US dollars in 2013.[32] From 2002 to 2012, obesity and overweight rates grew 12% among adults.[32] A cross sectional study on 3,140 students below the age of 15 showed that having lunch in fast food restaurant versus at home was associated with being overweight.[33]