China's most embarrassing burger joint, in a hurry

Compared with the "McMen believers" and "crazy four happy people" that are ubiquitous on the Internet, few consumers on social media seem to use "Burger King" as a consumer label. Burger King's "King's Day 9.9 Yuan Package" activity has been held for a year, although the cost performance is high, but the popularity is far less than the other two "1+1 Poor Ghost Package" and "V Me 50".

The parent company RBI's reflection on Burger King accurately sums up the current situation of this long-established fast food brand in the Chinese market: no embarrassment, no embarrassment, no superiority.

Author | King once

Edit | DR

Title Picture | "Angry Life"

A week ago, because of the announcement of an additional "packaging fee" for takeaway, KFC fiercely provoked the nerves of netizens, and therefore appeared on the hot search - although, while adding packaging fees, KFC also reduced the delivery fee.

For orders below 200 yuan, the packaging fee is capped at 2 yuan.

(Photo/KFC Home Delivery Mini Program)

Obviously, people's sensitive "budget nerves" are no longer the slightest bit provoking, even if the price increases by 1 yuan, it is enough to stir up water on the calm lake. But the truth is always simple, and there is scolding at least to prove that people still care, and black and red are always red.

What's worse than being frequently scolded on the hot search is that no matter how you toss, no one even scolds you.

As a competitor on the same track as McDonald's and KFC, Burger King is the brand that has been tragically forgotten.

Think back: When was the last time you ate Burger King? Most people can most likely only come up with a rather vague time frame.

Faced with the embarrassing situation of Burger King in the Chinese market, RBI, the parent company of Burger King, has also reconsidered. Some time ago, RBI CEO Josh Kobza admitted at the 2023 annual financial report analysis meeting that Burger King's performance in China did not meet expectations, "compared with the consumption potential and growth prospects of the Chinese market, Burger King is developing too slowly".

In a nutshell - while making money, it is neither much nor fast enough.

Indeed, compared to the "Wheat Gate Believers" and "Crazy Four Fun People" that are ubiquitous on the Internet, few consumers on social media seem to use "Burger King" as a consumer label. Burger King's "King's Day 9.9 Yuan Package" activity has been held for a year, although the cost performance is high, but the popularity is far less than the other two "1+1 Poor Ghost Package" and "V Me 50".

RBI's reflection on Burger King accurately sums up the current situation of this long-established fast food brand in the Chinese market: no embarrassment, no embarrassment, no superiority.

01

Burger King,

It's been embarrassing for a long time

Among the three royal families in every industry, there is always one that is very embarrassing.

By the end of 2023, the number of KFC stores in China will officially exceed 10,000, and the number of McDonald's stores will also exceed 7,000, and the company will officially announce its sprint towards the goal of "10,000 stores in China".

In the clarion call of the other two store sprints, Burger King seems a little out of place, after all, Burger King stores have just exceeded 1,500 in China in the same year.

肯德基第10000家门店。

(Photo/Yum China's official website)

As a consumer, the most intuitive feeling is that no matter which mall you walk into, there will be a KFC or McDonald's in F1 or B1 in the mall, but there may not be a Burger King.

For most consumers, KFC and McDonald's are like 7-Elevens blooming everywhere, as long as you want to eat, there will always be at least one 3 kilometers away.

Burger King is different. McDonald's in France once filmed a commercial in which a billboard on the highway said that it was 258 kilometers away from Burger King, and only 5 kilometers away from McDonald's. Although the situation in China is not so exaggerated, it is not bad, except for Beijing, Shanghai and Guangzhou, which have a large number of stores, in most second- and third-tier cities, Burger King is often a special choice to visit.

Some netizens complained that there is no Burger King in the center of Nanning.

(Photo/Screenshot of Xiaohongshu)

The number of stores determines the volume of revenue. According to Euromonitor International, KFC and McDonald's, the top two in 2021, have market shares of 12.0% and 6.7%, respectively, while Burger King ranks fifth with only 1.2% share.

But turning back the clock 20 years ago, Burger King was less embarrassed.

In 2005, Burger King's first store in China opened in a two-story retro western-style building near Jing'an Temple in Shanghai's "Wutong District", where every inch of land is at a premium.

When it first opened, the headline in the news report was "Western-style fast food battlefield staged the Romance of the Three Kingdoms". At that time, McDonald's, which entered China in 1990, had 666 restaurants in 100 cities in China, while KFC, which was the first to enter China, had 1,758 restaurants in China. Although Burger King entered the game nearly 20 years later than they did, the gap is not hard to catch.

Steve Desutter, then president of the Burger King brand in Asia Pacific, described the timing of Burger King's entry into the Chinese market in a Chinese phrase he learned from a friend: "It's better to come early than to come at the right time." ”

It's really a tricky time. KFC and McDonald's have been in China for more than 15 years and have basically completed the market education of Chinese consumers. At that time, the Western-style fast food industry was still in a stage of rapid development. In terms of income and price levels at that time, a meal at KFC and McDonald's was still not cheap for Chinese people.

The price of chicken leg burgers was not affordable 20 years ago.

(Photo/Picture Worm Creative)

To a certain extent, foreign fast food was still an unconventional consumption option at that time.

For example, at that time, it was the dream of all children to hold a birthday party at KFC, and parents often had to get a good score in the exam before parents could reward their children for a KFC meal. Until 10 years ago, KFC and McDonald's were still dating mecca for high school and college couples.

In 2005, when Burger King entered China, fresh brands remained attractive to the younger generation of consumers. This can also be seen from the location of Burger King's store, the first store opened in the core business district of first-tier cities, and the main product is a beef burger with a higher unit price.

When we entered China in 2005,

Burger King does not open the franchise.

(Photo/Burger King official website)

The slightly higher price also makes Burger King's customer base different from the other two.

After the opening of the first store in Jing'an Temple, some media visited the store and found that "during the non-weekend period, foreign customers account for half." The rest of the customers are basically white-collar workers and student couples from nearby companies", and at the same time, Burger King, which is located in a small western-style building, is more like a casual café than a fast food restaurant.

It can be said that Burger King focused on mid-to-high-end customers at the beginning, forming a differentiated difference from the other two. At that time, Burger King was positioned similar to today's Shake Shack.

However, such a strategy only worked for a short time.

In the seven years since the opening of the first store, Burger King has only opened 52 stores, and it has never left Jiangsu, Zhejiang and Shanghai. In contrast to the conservative Burger King, KFC and McDonald's have been holding high the banner of expansion, from 2005 to 2012, KFC added more than 3,500 new stores, and McDonald's added more than 500 stores, covering almost China's second- and third-tier cities.

More and more fast food brands have also brought down the price. Chinese people have begun to disenchant Western-style fast food as an option in their daily diet.

Western-style fast food has become an everyday thing.

(Photo/Burger King China's official WeChat)

It wasn't until 2012 that Burger King received a new injection of capital and finally decided to catch up and accelerate the opening of stores. But at this point in time, in addition to embarrassment, it is still embarrassing.

Not to mention that the cost-effective business district location has almost been grabbed by the other two fast-opening brands, and the brand recognition of Burger King is far less than the other two in second- and third-tier cities.

Since then, Burger King's store opening has not been as fast as expected. In 2018, Burger King surpassed 1,000 stores and said it would reach 2,000 stores by the end of 2021. But it won't be until 2024 that Burger King can break the 1,500 mark.

Burger King's 1,500th store to open in 2023.

(Photo/Burger King China's official WeChat)

At the same time, McDonald's and KFC also began to change their positioning at the same time early after a significant expansion and sinking, and turned to become more affordable and affordable. But for a long time, Burger King still did not come to his senses, and still maintained the unit price of 30-50 yuan for a single burger.

This kind of pricing strategy is fashionable and effective when people still have a hint of foreign filters for foreign fast food, but when people start to treat fast food only as fast food, this price is obviously outdated.

02

American-style burgers,

Sniped by the "Tustins".

Both the speed of opening stores and the pricing strategy have been slow, but Burger King's embarrassment is much more than that.

Not only is it difficult for old-timers like KFC and McDonald's to surpass, but what is even more thrilling is that the position of the "third in ten thousand years" may not be too stable.

In May 2023, the CEO of RBI, Burger King's parent company, said publicly that Burger King is still not on target in China, and that "we have indeed lagged behind the average growth of our peers and the industry over the past three years, mainly due to weak economics and financial constraints for single stores."

RBI's anxiety is not unreasonable, and it is true that Burger King is growing too slowly compared to other competitors. No matter what the positioning, there are strong competitors.

In the people-friendly positioning, Burger King's awkward localization strategy can't beat KFC and McDonald's who play with the Internet. KFC, for example, has an almost insane rate of new launches. According to the research report of Huachuang Securities, in 2019, KFC developed more than 1,900 new dishes and launched about 400 new products, with new products almost every day.

On average, new products are launched every day during the peak period of KFC.

(Photo/KFC official WeChat)

McDonald's, on the other hand, maintains a new co-branding almost once a month. In November last year, 500,000 cat litters launched by McDonald's were sold out as soon as they went online.

McDonald's and KFC have been doing weekday lunches for a year, and Burger King belatedly launched the "9.9 yuan King's Day". But at this time, whether it is Wallace, Tustin or Tex, they have all launched similar events, and it is difficult for Burger King to pull away from them.

At the same time, compared with the other two's "flower work", Burger King is also a little clumsy in marketing. The frequency of various joint activities is not low, but whether it is with "League of Legends" or the recent parrot BeBe, there is always a breath of "hit".

In terms of product positioning, Burger King's American-style "fire roast beef burger", which has always been the main focus, has also been threatened.

With the launch of Shake Shack in Shanghai in 2019, the development of China's premium burger market has ushered in a milestone leap. Subsequently, McDonald's introduced the Angus Beef Burger series in addition to the regular Big Mac beef burger.

At the same time, a variety of boutique burger stores are also blooming everywhere in first- and second-tier cities, and searching for "boutique burgers" on Xiaohongshu shows that there are boutique burger restaurants in every first-tier city.

Burger lovers have their own "Hamburg Map".

(Photo/Screenshot of Xiaohongshu)

In other words, Burger King's beef is no longer scarce, and its fire-grilled burgers are no longer hardcore for Chinese consumers. For true American burger lovers, you can choose a more professional 100-yen burger.

Under the attack of various competing products, in first-tier cities, Burger King's product positioning has begun to become a little inferior, and new product research and development has not launched a strong new fist product.

What's worse is that in the sinking market, there are also opponents catching up. Another strong competitor is Tustin, who made it from the county seat to the fifth ring road.

Burger King began to expand in 2012 and accelerated the opening of stores, at the same time, Nanchang, Jiangxi opened its first Tustin, which at that time was still mainly selling pizza. It wasn't until 2019 that Tustin opened its first burger store in Fujian, and switched to the label of "Chinese-style burger", gradually accumulating a stable customer base.

In just one year, the number of Tustin stores exceeded 500. In 2022, the number of its stores has exceeded 2,600. By 2023, that number has soared to 6,200, an almost exponential exponential increase.

Judging by the number of stores alone, Tustin has left Burger King far behind.

03

Turned around and sank Burger King,

Can it be done this time?

Today's Burger King, as RBI said in the 2023 annual financial report analysis meeting, "This is a profitable business, but the growth rate is insufficient".

In order to cope with this embarrassing situation, in 2024, Burger King has also made a lot of strategic changes. For example, Burger King (China) previously said that from 2023, it will maintain the opening of 200 new stores in China every year, and at the same time open franchises, on the one hand, to enhance the influence of existing cities, and on the other hand, to cover more cities.

Burger King is also exploring new ways to grow.

(Photo/Burger King official website)

At the same time, Burger King has also begun to explore a "cloud kitchen" model, in which restaurants do not offer dine-in and only serve delivery and pick-up customers.

The Burger King brand is not only in China.

At the event in New York, the CEO of RBI reportedly said that future expectations for the Asian market will be focused on India. The executive chairman of RBI believes that India's population base is large and the data on newborns will be better, and in the long run, these Indian newborns will become customers of RBI's brands.

Burger King turned and sank, and Shake Shack, Burger King's successor, faced a similar embarrassing situation as Burger King 10 years ago.

Most of Shake Shack locations are located in high-end business districts in first-tier cities, such as Shanghai Xintiandi, Beijing Sanlitun, Guangzhou Tianhuan Plaza, etc., and like Burger King back then, they also target middle-class consumers in first-tier and new first-tier cities.

But from the perspective of actual operation, it is obvious that the positioning of "expensive fast food" is also a little embarrassing at the moment. Shake Shack said that since August 2023, the development trend of the Chinese market has slowed down continuously, and the short-term pressure will continue throughout the fourth quarter and may continue into 2024.

In contrast, McDonald's "1+1 Poor Ghost Package" never sleeps. Perhaps in the current disenchantment of burgers, "expensive fast food" itself is a false proposition.

Proofreading: Zou Weiyun, Operation: Xi Xi, Typesetting: Tan Xin

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