Colonel Sanders’ Foray into China

Four score and seven years ago (1930), Colonel Harland David Sanders conceived his first restaurant. In 1952, the first KFC franchisee was inaugurated. By 1987, his ever-growing chain, Kentucky Fried Chicken, became the first Western fast food chain to enter China (The Guardian). At that time, 81 percent of China was living below the poverty line. Today, the tides are turning. China is quickly following the footsteps of Uncle Sam with its rising overweight population of 19 percent. In this age of ever-increasing globalization, fast food restaurants have infiltrated just about every corner of the country. Like in the United States, the influence of fast food brands like McDonald’s and KFC is growing as China becomes increasingly urbanized, which accordingly leads to decreased levels of free time. For a long time, foreign fast food restaurants in China have been marketed as a fancy Western luxury, targeting the middle class in stark contrast to its association with low-income consumers in the United States.

Perhaps Kung Pao chicken, wonton, and chow mein are the most well-known Chinese dishes with the advent of American fast-food chains like Panda Express (ironically). Yet, Chinese cuisine has existed for centuries, drawing influences from the numerous kingdoms that had existed previously. It is a unique combination of culinary history and traditional practices combined with the buzz of everyday upper middle class city life that have created the perfect conditions for fast food chains to achieve their current success. In traditional Chinese culture, a lot of care is given to the preparation of meals and health considerations play a significant role in deciding what goes on the dinner table. Throughout Chinese history, human manure has often been used as fertilizer due to the lack of livestock, which is why raw vegetables, especially salads, are not typically consumed (UNC Chapel Hill ibiblio Archive). Moreover, it is widely held that cold beverages are detrimental to the digestive system, which is why ice-cold drinks are seldom served, instead replaced by soup, hot tea, or hot water (Ibid.). In order to preserve freshness, fish are served as a whole rather than as filets (Ibid.). This means that compared to Western cultures, it takes more time and effort to prepare dishes due to the extensive heating required.

Since fast food restaurants operate entirely on the premise of efficiency, it meshes very well with the immeasurably large city populace which has less and less time for cooking. Peking University professor Guansheng Ma remarks in his paper, “Compared with other countries, Chinese people spend much more time on cooking,” averaging at two to three hours per day (Journal of Ethnic Foods). Although migrant workers in China work infamously long hours, even the wealthier classes, which multinational brands like McDonald’s and KFC target, face the same perpetual time crunch. According to the Boston Consulting Group, nearly half of Chinese consumers “reported feeling subpar because of lifestyle factors” including pressure from their jobs and long work hours (Boston Consulting Group). Younger people are particularly vulnerable to these pressures, as 30 percent of young adult respondents aged between 18 to 24 indicated “lifestyle ailments” (Ibid.). A James Bond-esque Chinese Internet slang term, 007, refers to the fact that programmers in the competitive Chinese technology industry often sleep at their workplaces, figuratively working all week from 0:00 in the morning to 0:00 of the next day. This stressed, time-pressed workforce is the quintessential market for fast food companies whose product is expediency and saved time (Sohu). The average drive-thru performance based on aggregated data from seven national U.S. fast-food chains was 180.83 seconds in 2016 (Quick-Service and Fast-Casual Restaurant Magazine). Since dine-in waiting times are typically even shorter, we can infer that fast food is around thirty times faster than cooking a Chinese meal, which takes between one and two hours (Journal of Ethnic Foods). Thus, due to the perfect socioeconomic climate, the Chinese fast food industry has grown very quickly in the short span of a few decades.

Fast food restaurants in Western countries are generally regarded as being primarily patronized by citizens of lower socioeconomic class; on the other hand, due to China’s obsession with the concept of face, McDonald’s target the upper and upper middle socioeconomic classes. In the United States, a Filet-O-Fish costs 4 U.S. dollars; in China, one costs 18.5 Chinese yuan (Renrenwang). While it may appear at first that a Filet-O-Fish is cheaper in China, the cost must be considered relative to the average income. A Filet-O-Fish costs approximately 0.1% of the average U.S. citizen’s monthly income, whereas in China which has a much lower GDP per capita, it costs a whopping 0.6%, constituting a significantly greater punch to the wallet (Ibid.). Thus, Western fast food chains have no choice but to target wealthier customers with more disposable income, especially as the urban upper middle class comprising of basic office workers grows larger.

An old Chinese adage goes, “People live for face as trees grow for bark.” Face is a sociological concept referring to an individual’s social dignity, which can be lost or gained. According to a recent survey conducted by China Youth Daily, “over 93 percent” of survey respondents said that they “pay much attention to their mianzi (face)” (China Daily). Moreover, 82.9 percent of respondents agreed that those of higher socioeconomic status tend to give more gravity to their level of face, which is greatly associated with spending power (Ibid.). Although the typical upper middle class citizen in China cannot afford expensive, out-of-reach luxury brands, what they can afford are fast food restaurants which allow them to interact with western culture and thereby advance their level of face (or at least buy the impression that they have face). According a 2016 McKinsey research report on consumer behavior in China, around 50 percent of consumers “now seek the best and most expensive offering, a significant increase over previous years” (McKinsey & Company). With this trend toward a more luxurious lifestyle, American chains like Starbucks and McDonald’s which started off with restaurants in high-spending locations have been much more successful than their less successful counterparts, such as Carl’s Jr., who have not successfully marketed themselves as upscale restaurants.

Upper middle class consumers in China want both expediency and face-saving quality food, but have less time to spare as their work schedules remain mercilessly packed. In this carnage of everyday office life, a new form of what could be called fast food has become tremendously popular: online food delivery services. The ultimate form of fast food, Chinese food delivery services like ele.me, Baidu, and Meituan bring food directly to office doors, essentially eliminating the need for consumers to queue up or move more than a few meters away from their cozy cubicles. Market researcher Enfodesk reported that these delivery services served a combined total of 176 million orders in the course of just one financial quarter of 2015, up 340 percent from the previous year (Xinhua). This further explains why the U.S. cheap fast food model does not work in China: most low-income factory workers subsist on food from their factory canteens (which have risen in quality in recent years) and don’t have much money to spare (Blomberg). On the other hand, many office workers order food to their offices with online ordering apps and thus have to buy food priced such that they can retain their face. Given China’s high Gini coefficient, there exists a huge divide between the blue-collar class and the white-collar class, and not much room for mid-priced restaurants.

While it is true that McDonald’s doesn’t exclusively target the lower socioeconomic classes in the United States, it is clear that their customer base primarily consists of a lower-class demographic. 39 percent of households earning less than US$20,000 annually “eat at least once per week at McDonald’s” (Brandon Gaille). Even though both the lower socioeconomic class of the United States and the upper middle class of China have a great need for expediency, they nonetheless differ in their attitude toward McDonald’s. While McDonald’s is regarded as a foreign innovation in Chinese culture, in the United States, according to Chicago research group 8Sages, “Consumers don’t think the food is high-quality, healthy or even that tasty. The restaurants seem dated and unwelcoming” (Chicago Business).

In an increasingly globalized world, China’s marriage with fast food is growing deeper due to the perceptive decisions of multinational fast food corporations. Yet, looking in the future, there are many obstacles for fast food companies to overcome as the Chinese consumer becomes increasingly health-conscious. In 2014, 73 percent of survey respondents in China reported that they would be willing to pay more for healthier products (Boston Consulting Group). Having just recently recovered from the Shanghai Husi rotten-meat scandal a few years ago, the fast food industry may have to consider increasing the availability of healthier options as a more educated young generation of consumers is emerging. The availability of grilled chicken sandwiches in Chinese McDonald’s restaurants signify a move away from fried foods and toward “natural” meat options that bear the appearance of actual meat rather than mystery beef patties that have garnered a negative reputation following multiple scandals. China’s fast food restaurants have experienced great success over just a few decades due to its unique combination of a need for face, expediency, and taste, as well as the increasingly packed lives of city-dwellers. At the same time, the industry will face numerous challenges in the future as it struggles to take on a new wave of health-consciousness.

References

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Ma, Guansheng. “Food, eating behavior, and culture in Chinese society.” Journal of Ethnic Foods. Journal of Ethnic Foods, Dec. 2015. Web. 3 Apr. 2017.

Wu, Chen, Magen Xia, Youchi Kuo and Carol Liao. “Capturing a Share of China’s Consumer Health Market.” BCG Perspectives. Boston Consulting Group, 25 Feb. 2014. Web. 3 Apr. 2017.

“现在都开始流行996工作制?还007呢!(A 996 workweek is now in vogue? Nope, it’s now 007!).” Sohu. Sohu, 14 Sep. 2014. Web. 3 Apr. 2017.

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“麦当劳在中国和美国大不同:消费人群 (A Great Difference Between McDonald’s in China and the United States: the Consumers).” Renrenwang. Renrenwang, n.d. Web. 8 Apr. 2017.

Shan, Echo. “’Mianzi’ of Chinese weighs a lot, comes at a price.” China Daily. China Daily, 08 Aug. 2015. Web. 8 Apr. 2017.

Zipser, Daniel, Yougang Chen and Fang Gong. “Here comes the modern Chinese consumer.” McKinsey. McKinsey & Company, March 2016. Web. 8 Apr. 2017.

“China Focus: China’s growing online delivery services feed office workers, smog avoiders.” Xinhua English News. Xinhua, 4 Jan. 2016. Web. 9 Apr. 2017.

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