In 2023, KFC China will achieve a breakthrough of 10,000 stores.
KFC expects to add 1,500 to 1,700 new stores in 2024 and 20,000 stores by 2026.
Burger King, the second-largest fast-food giant in the United States, still has no more than 1,600 stores after 19 years of development in the Chinese market.
Not long ago, consumers reported that the Burger King restaurant in Xinjiekou, the core business district of Nanjing, quietly closed down.
Burger King has set up more than 20,000 stores around the world, but it has closed its doors in China, and Burger King's parent company has been reflecting on this year's earnings conference: Burger King has indeed made money in China, but the growth rate is insufficient.
Burger King is from Florida, USA, and was founded in 1953.
At this time, KFC was only a year old, and Sanders, who was in his sixties, was still selling his fried chicken recipe on the side of busy Route 25. And McDonald's brand restaurants have not yet been born.
Although "Burger King" started early, it was ill-fated and was "sold" 5 times, and the owner changed one after another.
In 1959, "Fast Food Burger King" was officially renamed "Burger King". A few years later, the number of Burger King stores reached 250.
McDonald's, which was established a year later than Burger King, has done well in its franchise stores and went to market early. Burger King has always been tepid, and the founder wants to go public to make money, but his performance does not meet the listing requirements.
Due to the continuous decline in performance, Burger King has repeatedly resold between the American restaurant giant and the British restaurant king.
It wasn't until 2010 that Brazil's 3G Capital acquired Burger King and became its fifth owner. The refreshed Burger King's "Return of the King" has re-listed on the New York Stock Exchange.
Under the leadership of the new CEO, Burger King has finally ushered in spring. Since then, Burger King's revenue has risen to include stores in more than 100 countries around the world.
Next to the McDonald's store, you can always find Burger King. In terms of sales, Burger King directly attacked McDonald's weakness and fought directly.
Burger King's burgers, which are larger than McDonald's, are healthier and feature "grilled over an open flame and fried without oil".
In 2017, Burger King directly airdropped a huge oven to McDonald's Corporation, and also accompanied it with a song, satirizing McDonald's burgers as fried "garbage", which greatly disgusted McDonald's.
In the years of falling in love with McDonald's, the number of Burger King stores worldwide has exceeded 20,000, and the total global revenue has exceeded 220 billion.
Seeing that the old rival McDonald's is thriving in the Chinese market, Burger King will naturally not let go of China's "big cake".
In 2005, Burger King entered the Chinese market under the responsibility of TAB Foods Investments (TFI), Turkey's largest restaurant group.
Although Burger King has secured the second position in the global burger industry, after coming to China, it is obviously "unadaptable".
First of all, KFC entered the Chinese market in 1987, followed by McDonald's in 1990, and Burger King belatedly arrived in 2005.
This late 17 years is the cultivation period of the market, and the stage when Chinese consumers gradually build up their awareness of Western-style fast food represented by hamburgers, fried chicken and French fries.
In 17 years, McCann has developed a group of potential customers into loyal fans, and they have achieved rapid development in the Chinese market, becoming "synonymous" with Western-style fast food to a certain extent, and the brand image is deeply rooted in the hearts of the people.
Burger King missed out on the golden stage of the rapid development of Western-style fast food in China.
Burger King is not only late, but also slow, opening only 52 stores in the first seven years of its entry into China.
In 2012, after receiving investment, Burger King decided to speed up the process of opening stores, but found that it was difficult to find suitable stores in mainstream business districts, and good stores in mainstream business districts were all occupied by KFC and McDonald's.
In addition, due to the limited number of stores, Burger King faced considerable challenges in increasing consumer loyalty to the brand.
According to the data, as of March 2024, in Chinese mainland, Burger King covers 162 cities and has 1,593 stores.
It can be seen from the financial reports of McDonald's and Yum Restaurant Group that in the Chinese market, as of December 2023, McDonald's stores have reached 5,903, and KFC stores are as high as 10,296.
The Chinese burger brand Tustin has risen rapidly in recent years and has a strong momentum of development. By November 2023, the number of Tustin stores has exceeded 6,000.
At the end of 2018, Burger King unveiled an ambitious plan to add 1,000 new stores within three years.
Subsequently, in 2019, Burger King actively expanded the market, adding about 300 new stores, bringing the total number of stores to about 1,300.
From 2020 to 2022, the number of stores will basically remain around 1,400. It was not until November 2023 that a new breakthrough in the number of stores was achieved with difficulty, reaching 1,500.
The small number of stores has led some consumers to evaluate Burger King as: I forgot that there is also Burger King. It's delicious, but who would run a few kilometers for a quick meal? After all, there are 4 KFC and 3 McDonald's within a 2km walk of my house.
Fast food is all about convenience, price and consumption habits, and it is obviously difficult for Burger King to do so due to the small number of stores.
At the same time, in terms of localization strategy, Burger King is still slower than other brands.
KFC has been a leader in localizing new products, developing more than 1,900 new dishes and launching about 400 new products in 2019.
McDonald's is committed to attracting consumers through co-branded new products, with new moves almost every month. In April 2024, McDonald's will work together with Sanxingdui Museum to carry out cross-border linkage.
When Burger King tried to seize the weekday lunch market by launching the "9.9 Yuan King's Day" campaign, McDonald's and KFC had already taken the lead, and the campaign had been in place for a year.
In addition, brands such as Tex, Wallace and Tustin also have corresponding activities, and Burger King's activities did not highlight their advantages.
Although Burger King has also made many attempts at localization, launching fried chicken in red oil hot pot, beef brisket burger with bamboo shoots and peppers, king pork knuckle burger and little raccoon crispy chicken burger, etc., it has been a bit low-key in publicity and has failed to get enough exposure, and consumers' awareness of these new products is not high.
In the minds of consumers, the "burger category" is equivalent to McDonald's KFC.
In addition, in terms of marketing, Burger King is too inferior to McDonald's and KFC.
Burger King, whether it's a TV commercial, or a holiday deal, is almost none. Even if it is promoted online, there is no outstanding performance.
Entering the game too late, developing too slowly, not localizing enough, and not marketing enough, resulting in the embarrassing situation of Burger King today.
In China's Western-style fast food market, there are many latecomers other than McDonald's and KFC.
Various boutique burger joints have sprung up in first- and second-tier cities, and every first-tier city has a boutique burger joint that they are proud of.
This means that for Chinese consumers, Burger King's signature fire-grilled burger no longer has a unique appeal, and consumers who truly love American burgers can opt for a more professional high-end burger brand.
Under the pressure of various competitors, Burger King's product positioning in first-tier cities began to show some signs of vacillation, and it did not launch a new product with strong appeal to stabilize its position.
What's worse is that in the sinking market, there are also competitors who are quickly catching up.
One of the formidable competitors is Tustin, the "Chinese burger" that has rapidly expanded from the county seat to the core of the city.
There are also local brands Wallace, which occupy the sinking market with its cost performance and a large number of franchises, and SHAKE SHACK, which opens the market with high-end positioning and social attributes of stores.
In order to tear a hole in this market segment, it needs a sufficiently differentiated positioning, and Burger King has not been able to do it.
According to the official website of Burger King, the site area of the franchised store is about 200-250 square meters, which means that the threshold for joining Burger King is high, and the capital threshold is about millions of yuan.
This also means that even if the franchise is opened, due to the higher investment threshold and longer return on investment cycle, it will still not be able to expand as quickly as a small coffee, milk tea, and snack bar.
This is also a test of how Burger King can improve store efficiency with more flexible store types, improve store opening speed, and further move towards the sinking market.
In the face of a highly competitive market, Burger King has also been seeking breakthroughs and has made many positive efforts, and has made new attempts and explorations in digital transformation and e-commerce channel expansion.
Atakan Bozkurt, CEO of Burger King China, said that digital innovation is the key to the company's success, and Burger King is fully embracing the digital age.
Burger King wants to use digitalization to reduce costs and increase efficiency and expand its potential.
On the one hand, it will increase the source of sales through digital platforms, and on the other hand, it will optimize digitalization-related expenses in the process of development, flexibly support multiple channels, and reduce the complexity of development.
At the same time, Burger King experimented with a "cloud kitchen" model, in which the restaurant does not offer dine-in, but only serves takeaway and pick-up customers.
In addition, with its own offline physical stores and user market, Burger King has established its own private domain traffic circle through mini programs.
Through the gameplay of social fission, online marketing, and the conversion of customers to the store online to offline and other retention methods, it has successfully broken the confinement of the traffic platform.
Burger King also uses Meituan's consumer review feedback system and research tools to create new products and popular products, and also cooperates with Meituan with other IPs for joint marketing and joint breakthrough.
It is also actively building its own marketing matrix, in addition to the official account, Weibo, Xiaohongshu, its official Douyin live broadcast room also has 1.427 million followers. In June 2023, Burger King China announced that its online membership exceeded 100 million.
Burger King has been trying, trying and breaking through.
McDonald's and KFC are like two mountains in front of Burger King, whether it is the number of stores, localization strategy, or marketing and promotion, Burger King is insurmountable.
Burger King is also unable to avoid head-to-head competition with McDonald's and KFC through product differentiation.
At the same time, Burger King is also facing the impact of "Chinese-style burgers".
Tustin, known as the "Honey Snow Ice City" in the hamburg industry, Wallace, which has more than 20,000 stores, and many rookies such as Tex, Xiangdowei, Palo Burger, and Niu Joburg have risen.
As latecomers continue to join in, the industry competition has become more intense, and consumers' enthusiasm for Western-style fast food has gradually cooled down, and they have begun to choose healthy eating methods.
In the face of such market changes, how should Burger King adjust its strategy and find a way to break through?
—End—
Resources:
Red Meal Network "Store Growth Falls Short of Expectations, Burger King China Starts to "Retreat"?
New Weekly "China's Most Embarrassing Burger Joint, Anxious in the Cracks"
CDIE Digital Innovation Expo "Burger King: Leading the Digital Transformation of the F&B Industry"
Jiemian News "Burger King's Parent Company Reflects on China Business: Making Money, But Opening Stores Is Still Too Slow"
The brand's "The King" Who Was Sold Five Times: Burger King"
Author: Born to the Sun
Editor: Willow Leaf chatter