#4月财经新势力 #
Source: BusinessWeekly
Source: FDL Foodatalink (ID: foodatalink)
Authors: Yun Yu, Ma Baiguo
After more than 30 years, Chinese fast food has once again opened the era of dominance, who will become the next Chinese "McCann"? How will Chinese fast food create a new local legend?
In 1987, KFC crossed the sea and landed its first store in Qianmen, Beijing. Three years later, McDonald's announced its official entry into the Chinese market by establishing its first store in Shenzhen. The arrival of McCann made the taste buds of Chinese consumers experience what fast food is for the first time, and imported products such as burgers, fries, and fried chicken also became a "45-degree elevation angle" in the hearts of many people at that time.
Later, with the continuous development of China's economy, in the past 36 years, although fast food that once held the halo of "luxury" gradually returned to the essence of convenience, efficiency and high price in the minds of consumers, the high-pressure and fast lifestyle prompted more and more people to love fast food.
In this context, the development of China's fast food market has shown an expanding trend and has become a presence that cannot be ignored in the consumer market. Although the growth rate of China's catering market slowed down in 2020 under the influence of the epidemic, the Western-style fast food industry still showed resilience. According to iMedia consulting data, the size of China's Western-style fast food market has reached 280.07 billion yuan in 2021 and is expected to reach 320.12 billion yuan in 2022.
Source: Sohu
From the initial McDonald's, KFC, Pizza Hut, Burger King and other international leading fast food chain brands into China, to now have many domestic brands such as Wallace, Tustin and so on, the development of China's fast food market is not only a business history, but also a witness of the transformation of the market economy.
In this process, FDL Digital Food advocate found that domestic brand players continue to challenge giants through unique business strategies or clever marketing methods, and strive to create one local new legend after another.
First, the player of flowing water, the iron "McCann"
In the more than three decades of China's fast food boom, generations of new consumer groups have witnessed the ups and downs of countless fast food brands, and people's expectations and needs for fast food are constantly changing. However, no matter how the fast food track changes, it is always impossible to bypass the two giants of KFC and McDonald's.
Source: Sohu
As the guide for Chinese consumers to eat fast food, "McCann" has not been smooth sailing for so many years, and the reason why it has remained brilliant is due to its preconceived image and infiltration marketing that keeps up with the times.
In the early years, "McCann" easily occupied the high ground in the minds of consumers with the aura of overseas brands, Western-style new experience and standardized, large-scale and professional business model, and built a strong and solid brand barrier in the immature Chinese market.
As the so-called "people who do things with color, color decay and love relaxation", for Chinese consumers, even the freshest taste experience will one day return to normal. In addition, with China's economic development, national self-confidence has been greatly improved after the millennium, and the "foreign moon is particularly round" story has become increasingly weak on the purchase of Chinese consumers.
In order to capture the hearts of Chinese consumers, "McCann" has embarked on a multi-dimensional innovation from taste to nutrition and health, to service experience and spiritual needs.
At that time, the first step of "McCann" was to start with store space and services to meet the hidden needs of Chinese consumers at that time. The so-called implicit demand, that is, the customer wants, but until the demand is fulfilled, he does not know what he wants.
For example, at the beginning of the development of the fast food industry, KFC and McDonald's will provide children's leisure areas to meet the needs of most white-collar workers while taking care of children. Until then, most customers in China didn't know that they or their children would want children's toys when they dine, and that they would get a smile from a waiter when ordering food. By meeting these hidden needs, "McCann" stands out from many fast food outlets and finds its own selling point and positioning.
The second thing McCann did was to take off the "junk food" hat that consumers put on fast food. In this regard, "McCann" has introduced healthy meals such as soy milk and salad, and launched healthy meals such as 500Kcal set menus to refresh consumers' cognition. At the same time, they are also keen to prepare and participate in various nutrition and health-related public welfare activities, so as to shape a new image of health in the minds of consumers.
However, the key to keeping "McCann" in the long term is its strategy of actively embracing localization.
For example, in menu innovation, "McCann" will combine local eating habits to carry out the implantation of local culture. From the perspective of the Chinese consumer market, "McCann" caters to the "Chinese stomach" by launching products that blend Chinese and Western, such as KFC's crayfish grilled chicken burger and McDonald's snail powder burger.
In addition, since 2000, after KFC successively launched localized dishes such as skinned egg lean porridge and soy milk fritters, McDonald's followed suit. In 2021, KFC launched the "Good Morning City Taste" program, which launched local breakfast delicacies such as hot dry noodles, spicy soup, and xiaolongbao according to the dietary characteristics of different cities. In 2022, McDonald's launched the late-night snack project "McMak Night Market" and launched exclusive products such as "beer + chicken rack".
Source: KFC, McDonald's official
In addition, since 2000, KFC has successively launched localized dishes such as lean porridge with preserved eggs and fritters with soy milk, and McDonald's has followed suit. In 2021, KFC launched the "Good Morning City Taste" program, which launched local breakfast delicacies such as hot dry noodles, spicy soup, and xiaolongbao according to the food characteristics of different cities. In 2022, McDonald's launched the late-night snack project "McMak Night Market" and launched exclusive products such as "beer + chicken rack".
In terms of brand marketing, "McKinky" draws on the popular domestic "meme culture" to make the brand more deeply rooted in the hearts of the people. For example, KFC's "Crazy Thursday" literature is a phenomenal marketing event in the catering industry in recent years, and it is a must-talk topic for young consumers every week, relying on the "V 50" meme KFC to gain a large number of fans and achieve considerable revenue.
McDonald's is more "crazy" than KFC, and the official end has convened countless Maimen believers to open a very new "spiritual marketing" to adapt the brand IP to the domestic market.
Source: Network
In addition, continuous cultural output to consumers is equally important for brand influence. To this end, "McCann" often collaborates with fashion brands, and even Blackpink member Lisa takes fashion photos for McDonald's fries, so that now, McCann is not only competing in meals, but also in cultural dimensionality. The role of brand culture is to build consumer beliefs. And faith is enduring, just like religious belief, it has a inheritance role and has a far-reaching impact.
However, with the rapid change of times, many local fast food is now quickly seizing the remaining market, and they have taken advantage of the diversified needs of contemporary consumers and based on a keen insight into the shortcomings of "McCann", and launched attacks again and again through differentiated play aimed at the "Achilles heel" of these foreign fast food giants.
Second, from real kung fu to Tustin, the relay race of local super brands continues
If you want to say which country has the most food in the world, it must be China. Those who fly in the sky and run underground cannot escape the fate of being eaten on the Chinese table. The history of Chinese food has always occupied an important page in the Chinese cultural system, and it is loved not only by consumers in Asia, but also in Europe, the United States and Western countries.
However, why has China, with its long food culture, not made a well-known fast food chain brand?
The reason is that in addition to the strong suppression from foreign brands such as "McCann", it is also limited by the diversification of Chinese tastes, obvious regionality, and complex processing that cannot be standardized. However, even so, there are still many brands that actively jump into categories and strive to find ways to break the situation.
1. Real kung fu halfway dumb
As a well-known fast food brand in China, the success of Zhen Kung Fu comes more from its unique brand marketing strategy.
In the 90s, Zhen Kung Fu imitated McDonald's, established a central kitchen and "automation + standardization" store process, and developed a computerized program-controlled integrated steamer, which realized that the restaurant did not need a chef and took food in 80 seconds, overcoming the problem of "Chinese food standardization".
Source: Sohu
In order to improve the efficiency of enterprises and reduce operating costs, Zhen Kung Fu adopts a chain operation model and introduces professional managers following the example of Western-style fast food. This can help enterprises break through management bottlenecks and increase advantages such as price and brand. In addition, Zhen Kung Fu has developed a sustainable operation method focusing on the Chinese fast food field (becoming the manager of the entire supply chain to manage the store downward), completing a series of automated processes to maximize profit margins and inventory turnover, and providing it with a long-term competitive advantage with its own supply network.
On the other hand, seeing the negative image of foreign fast food as "unhealthy" in the minds of consumers, Zhen Kung Fu grasped the selling point of "health", featured the original steamed products of Lingnan diet, vigorously promoted the advantages of Chinese diet nutrition, and shaped the value advantages of its nutritional products. According to its own positioning, he proposed a special slogan with double entendres such as "nutrition or steaming".
Source: Baidu Map
At the same time, in order to better transform, Zhengongfu is also constantly developing into the Internet industry platform. Pan Yuhai once said in public that in addition to directly operated stores, Zhen Kung Fu has a self-sufficient supply chain, O2O model and other combined platforms to develop the market more comprehensively.
As of 2014, the number of Zhen Kung Fu stores reached 570, making it the only local brand among the three major Chinese fast food chains.
Unfortunately, due to the limitations of the taste of steamed food, the lack of innovation of the product itself, and the turmoil of the Zhen Kung Fu family infighting and trademark door, coupled with the intensifying competition in China's fast food industry, the once first Chinese chain brand under internal and external troubles is now no longer as brilliant as it used to be.
2. Wallace who is king of cost performance
Different from Zhen Kung Fu's localized dish innovation and grasping nutritional selling points, Wallace's rise relies on a low-price strategy of deep cultivation.
In the 90s of the 20th century, when McDonald's and KFC quickly seized first-tier cities and set off a "foreign fast food" boom in China, the fast food market in second- and third-tier cities was still in a blank state. Wallace, like many copycat foreign fast food brands, embarked on the road of "rural encirclement of the city". Due to the restrictions on consumption in second- and third-tier cities, Fahrenheit Brothers decided to cut into the market at a low price, and the "Special Price 123" promotion (Coke 1 yuan, chicken leg 2 yuan and Hamburger 3 yuan) came into being, resulting in unprecedented sales growth.
Since then, Wallace has figured out a development path that suits him, learning from his predecessors in products and services, but keeping prices firmly below half of them.
Source: NetEase
In order to greatly control costs, Wallace's store location abandoned expensive rents in favor of lower rent areas. In terms of operating area, give full play to the value of each square meter, and strive for the effect of "although the sparrow is small, it has all the organs".
In addition, Wallace also uses the expansion model of "cooperative association" to reduce marginal costs by increasing the scale. For example, costs are reduced by purchasing decoration materials on a large scale. In addition, shares are delegated to trained employees to form a community of interests with the company. Through this organic growth method and lowering the threshold for joining, Wallace entered a period of rapid development with small fights, and even the number of stores far exceeded the total number of McCann.
It can be seen that Wallace's success also reflects the actual demand of the sinking market. While people are satisfied by various big names, it does not mean that there is no need to meet the sinking needs.
And behind this crazy cost reduction for the sake of low product prices there are also fatal hidden dangers. For example, food safety issues. This is also an inevitable problem in Wallace's development route of pursuing low gross profit and large-scale operation. On the basis of the management of tens of thousands of stores, it is necessary to continue to pursue high turnover rates, which will make it difficult for Wallace to ensure quality control and provide incentives for frequent food safety problems.
Source: Sina Finance
In addition, the food tastes bad, and the store decoration is not beautiful enough. The consumer market has always changed with the changes in crowd preferences, and the healthy and green catering atmosphere has gradually spread among the consumer group, and how to rapidly expand to achieve scale effect while meeting the basic standards of food safety may be Wallace's next wealth legend.
3, the rising star Tustin
The timeline pulls back to 2023, if the hottest fast food brand now, there will be no less of the eye-catching red and white lion "Tustin".
Source: Zinc scale
Compared with Wallace's direct copy, Tustin's business strategy is more innovative. In front of the predecessors who have already made achievements, Tustin still opened more than 3,000 stores against the trend, and the expansion speed even exceeded that of Wallace, the king of 10,000 stores, successfully carving out a bloody road in the highly competitive fast food track.
Source: GeoQ Ana Brand Analytics tool
Tustin China Hamburg in the camp store heat map
According to data from the Operation Research Institute, the number of videos related to "Tustin" Douyin currently exceeds 2.8 billion; Xiaohongshu related notes exceeded 20,000; A single evaluation video on station B has 2.68 million views...
However, at the beginning of its establishment in 2012, Tustin also experienced a bitter road of nearly 8 years. Until 2018, after Tustin began to use Chinese-style hand-rolled dough as a fort embryo, the combination of Chinese and Western ideas of roasted cakes and fried chicken quickly attracted countless fans, satisfying customers' long-term curiosity.
In addition to successfully getting out of the circle through the category innovation of Chinese burgers, Tustin also set the price between 9-35 yuan, which will successfully avoid the positive rigidity with McCann and obtain a curve to save the country by improving its development space.
Judging from Tustin's entry, it is more focused on opening stores in mid- and lower-tier cities.
At present, the number of stores in fourth-tier cities is the largest, followed by second-tier cities, while there are fewer stores in first-tier and new first-tier cities, and Tustin's offensive against the sinking market is still fierce. And its burgers are as delicious as the more expensive McCann, while filling the gap in the sinking market where Wallace has a poor taste.
It can be said that Tustin's success is another innovation standing on the shoulders of giants. It not only meets the requirements of consumers for cost performance, but also greatly improves the taste under the premise of maintaining quality control. However, how to continue the momentum of the fast-food industry with many masters, Tustin will have to face its own shortcomings.
Source: Tustin
For example, how the characteristics of hand-rolled cakes and freshly made sales are relatively balanced with the fast food restaurant's fast delivery. Each hamburger cake is rolled out by hand, kneaded after fermentation and placed in the oven, which makes Tustin have to wait at least 10 minutes each time. As a result, many of the bad reviews online come from slow meal times.
Therefore, the speed of meals will be a key challenge to test Tustin's ability to continue running fast. If it can't do the fast, convenient and highly replicable attributes of fast food itself, its competitiveness will be greatly reduced.
In what appears to be a fast food track for the Red Sea market, Tustin's contrarian expansion last year was undoubtedly impressive, but it also proved that the potential of the sinking market and the county economy is huge. From the perspective of Tustin's own positioning, pricing and store expansion strategy, it has very delicately identified its positioning and development direction, and has repeatedly achieved good results.
However, in today's situation where there are international big brands that have developed for many years, and there are chasing soldiers to constantly fill the blank market, Tustin China Hamburg still needs to continue to build its own moat, not only in terms of products and marketing, but also in the strategy formulation of long-term expansion, which is very important, only in this way can it lay the foundation for rapid development.
Since the reform and opening up, China's fast food industry has experienced more than three decades of ups and downs. In this process, both giants and cutting-edge companies are trying to penetrate each other and consolidate their development advantages, and promote the development of the industry in this continuous game, gradually forming a situation where big names are standing and regional brands are dominating.
Although foreign brands still dominate the mainland fast food market, FDL Digital Food firmly believes that the super brand of Chinese fast food will inevitably appear, and our local enterprises will eventually accumulate experience in repeated challenges and explore a unique development path exclusive to the mainland consumer market, which can promote the rapid development and progress of China's local catering industry.
Reference source:
1. iMedia Consulting, in 2022, China's Western-style fast food industry: "fast food formal meal" has become a new direction, and innovative marketing methods will help the further development of Western-style fast food
2. FDL Digital Food proposition, global localization trend insight, how can brands innovate "Chinese taste" and meet "Chinese stomach"?
3, radar finance, real kung fu and "Bruce Lee" entangled again, what happened to the once first brand of Chinese chain?
4. Dark horse marketing, from model to product, can Jia Guolong toss the next super brand?
5. Entertainment Jun Business Review, creative marketing "shoulder" McDonald's localization marketing road
6. Zero One Think Tank, China's local "king of fast food": Wallace's business model is at the bottom
7. Xi'an loves shopping, Xi'an loves shopping: 2,000 stores are opened in half a year, and Chinese-style burgers are sinking into the market