This article talks about Yum China, the company behind KFC in China, opened up their first Taco Bell last month on the 9th. But the business was not doing as well as planned because of people's unfamiliarities with Mexican food. Many Chinese consumers admire fast food chain from the United States and Europe, such as KFC and McDonald's because they believe in the quality of food in developed countries. Chinese consumers considered the food from Taco Bell as food from a developing country with low quality. To target the consumers in China, Taco bell tried to make their menu more appealing by adding healthier food, getting rid of greasy junky food; they also added Japanese beer and slushes. It did help attract more new consumers especially the younger generations because of their desire to try out new things. Words of mouth and Internet blogs also help to attract more and more people to try out these delicious Nacho chips at Taco Bell.
I am amazed by how fast the economy in China grows. People are happier in general and have more time to enjoy "luxuries". I came from a small developing city in China six years ago. From what I remember, people considered eating out a luxury, and they did not encourage such idea unless it was on very special occasions. The city was not culturally diverse and people were having a hard time accepting foreign things. Even when McDonald's was first open in my city, people were not buying it until later as they learned more about this fast food chain. Last summer when I went back to China, I was stunned when I found out that two Starbucks were open in the city and were doing very well. China is a huge market for foreign brands. Investors would be able to increase their profit significantly if the Chinese consumers have access to learning more about the brands. Platforms such as Facebook and Google would be a great place to learn about all these brands in other countries. However, these platforms are banned in China. Investors might have to try harder to educate the people on foreign brands if they want them to succeed in one of the biggest consumer markets in the world.
Link to article: https://www.nytimes.com/2017/02/10/business/china-kfc-taco-bell.html?ref=business
4 comments:
i thought that this article was interesting because fast food is huge in the united states and to read that when taco bell was introduced to china it wasn't widely accepted at first. i think that they are doing a good thing by changing up the menu up to fit the Chinese culture better. i think that advertising will be huge in informing people what the restaurant is all about, this is where McDonald's has the edge because everyone knows what it is and what they have to offer.
I am not surprised that Taco Bell is not doing well at first in China but I am surprised to hear that people are automatically assuming the food quality is bad. The article goes on to say that the restaurant even installed windows so that people could see their food being made for transparency. They seem to be really skeptical about the food and the company which isn't good for a new business. I agree with Zach that advertising and tailoring the menu towards Chinese culture staples is the right move for the company and I am interested to see how Taco Bell will do in China.
This is really interesting and I appreciate your personal story to help put this article in context. I think the biggest take away is that there is a huge untapped market in China for foreign goods. If companies are able to successfully brand themselves in China, they could really win out. It will be interesting to follow the growth of Taco Bell and other companies experiencing issues breaking into the Chinese market.
I feel one important reason for Taco Bell's unsuccess in China is the changing of their thoughts. About 20 or 30 years ago, at the beginning stage of the Reform and Open in China, when KFC and McDonald came to China for the first time, those fast food stores were extremely popular. That's because at that time, people still had the opinion that foreign things are always better than the domestic stuff. However, recent years, people have gradually changed their opinions. With the market's further opening, more foreign things got into China, people began to measure good and bad. They gradually understand the unhealthy side of fast food and be aware of a health dietary. The feature of "foreign things" of Taco Bell is not that attractive than before.
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