After the soft launch of Taco Bell in December 2016, Yum! Restaurants China introduced several new Taco Bell outlets in 2017, all in Shanghai, where locals are willing to try new products. The new stores add dynamism to Latin American fast food in China, with explosive value growth, the fastest among all fast food in 2017, mainly growing from a small base.
The enriched choices in consumer foodservice, great convenience of home-delivered dishes from third party ordering/delivery service providers and the growing popularity of specialist coffee shops among young consumers and white collar workers further squeezed the development of fast food in 2017, resulting in decelerating value growth. This was also a sign of growing health consciousness among local consumers who usually associate fast food with unhealthy dishes and often resort to other seemingly healthier choices.
Amid the flat growth of overall fast food, convenience stores fast food continued to record double-digit value growth in 2017. Apart from its small base, the robust growth was also because convenience stores fast food offers one of the important meal solutions to white collar workers who need to eat quickly during the short lunch break when dining places are usually crowded at this peak moment.
With well-known fast food brands, KFC, East Dawning and Taco Bell, Yum! Restaurants China continued to lead the fragmented fast food landscape. Despite the decelerating growth in overall fast food, the company managed to gain value share, due to its revamped stores in higher-tier cities, venturing into lower-tier cities as well as the debut of new fast food brand Taco Bell.
To attract the new generation, Yum! Restaurants China premiered KPro by KFC in Hangzhou, home base of Alibaba Group, in the second half of 2017. Targeting urban professionals, the new-concept KFC outlet offers the seasonally changing menu and prepares fast food with the freshest ingredients.
Three of the leading five players in fast food are multinational companies; Yum! Brands, McDonald’s Corp and Restaurants Brands International, owing to their established brand awareness as well as consistent product quality and service standard. Domestic leading players, represented by Kungfu Catering Management and Ajisen (China) Holdings, are gradually losing value share, mostly in Asian fast food, amid intensifying competition.
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