China opened its economy to the outside world 30 years ago, sparking a natural curiosity towards Western culture and brands.
「You’re dealing with a civilization that pretty much closed itself off to the outside world for the greater part of the post-World War II period,」 Dong says. 「And even before WWII, they did not have a lot of exposure to the West. So as a result, there was a huge fascination with foods that are completely foreign to the Chinese palate.」
Chains like Pizza Hut and Häagen-Dazs have been able to leverage the Chinese intrigue and trust of Western brands and rebrand themselves completely. Häagen-Dazs markets itself as a premium brand and often decks out its stores in gold accents and posh red furniture to target the higher-end consumer.
「Until recently people bought foreign products solely as a status symbol, so the more expensive the better,」 says Antonio Graceffo, an economics PhD and MBA at Shanghai University. As a result, it’s able to charge three times as much in China: A three-ounce serving of Häagen-Dazs ice cream commands the equivalent of $14.29 in China, compared to $4.87 in the U.S.
But that desire for American 「status symbol」 dishes might be fading. In recent years, as China’s economy has soared and the middle-class has grown, market share for these classic American companies is decreasing as more Chinese companies enter the scene.
Although Yum Brands still controls more market share, domestic companies like Hua Lai Shi and Ting Hsin International Group (which owns the burger chain Dicos) are slowly catching up. Both brands are American fast-food copycats, with menu items like chicken nuggets and burgers. The biggest difference is that they tend to be cheaper and are better at meeting Chinese food preferences, with options like tuna salad bagels with corn, fish fillet burritos, and a hamburger with a deep-fried shrimp patty smothered in XO sauce and sandwiched with a rice patty.
While these dishes may seem odd to the average American, Chinese consumers do not have predisposed biases as to what hamburgers, bagels, and burritos should taste like, allowing for more creativity.
Despite the increased competition, Dong says American companies don’t seem to be slowing down their Chinese expansion plans. Even smaller brands are getting into the game: NYC-based burger chain Shake Shack recently announced it will open in Shanghai in 2019.
「The numbers are still holding up well and these American companies are still announcing that they’re opening up more stores,」 Dong says. 「That’s a signal that they have confidence in the market and are not pulling back.」
Clarissa Wei is an LA-based journalist who has spent extensive time in China and Taiwan.
Editor: Daniela Galarza
Source: Eater
https://www.eater.com/2018/3/20/16973532/mcdonalds-starbucks-kfc-china-pizza-hut-growth-sales