KFC's owner: A witness and beneficiary of China's economic rise
By Liu Jiayi
Yum China was among the first operators who brought American taste to Chinese consumers. At the same time, the business has enjoyed the fruits of China's reform and opening up.
In 1987, the first KFC restaurant opened in Beijing. Over 30 years later, Yum China has reached the milestone of 10,000 stores in the country, with locations across 1,500 cities and towns.
Even last year, amid the pandemic, China's largest restaurant chain further strengthened its position by opening 1,165 new stores, showing greater confidence in the Chinese market.
In an interview with CGTN, Joey Wat, the CEO of Yum China, pointed out why she is so committed to the Chinese market and what lies ahead for Yum China.
CGTN: Let me start by asking you how has Yum's business model changed since it first entered China back in 1987?
Wat: I would use one word to describe it – it's "resilient". Such resilience comes from some fundamental philosophy towards the China market. First, we truly believe in the future and the growth of the China market from day one. We entered China and opened the first store back in 1987. And as of 2020, we have slightly more than 10,000 stores right now. A few things did not change. "Stay" is still critical to our fundamental belief. So, even last year with COVID-19, we opened 1,165 stores, which is the record number of new stores in our 33-year history. And in order to be part of the community, we always focus on services, innovation in food with a local flavor that is loved by our customers here. Like last year, we launched 500 new products in KFC, Pizza Hut, and our other smaller brands in the middle of COVID-19.
CGTN: Last year, you opened 1,165 new stores despite the uncertainties brought by the coronavirus. So what gave you the confidence to really open this record amount of new stores in China?
Wat: The first is the new store opening, because even though we are in 1,500 cities in China, there is still white space. We are still tracking about 700 cities in China, in which we don't have even one KFC, Pizza Hut, or any of our brands there. By going down to lower-tier cities, there are more opportunities to bring our food to customers there. The second is the store portfolio growth. The third is digital delivery. Our country's digital and technology capabilities are absolutely fantastic. We start to invest in the membership. As of right now, Yum China members in the range of 300 million. And that helps us a lot last year.
CGTN: And speaking of technology, What do you think about innovation, especially innovation in China?
Wat: It sounds bold, but we believe that is actually a very down-to-earth vision because we truly believe in innovation. We should continue developing our business so that we can continue to provide jobs for more than 400,000 people. We must, and we have to innovate at all aspects from food, from operations, from the way we think, from the digital deployment, from infrastructures. You name it. It should be developed in mindset, and it should be a way of doing our job so that we can continue to survive and hopefully thrive in such an exciting market.
CGTN: So, as China embarks on its "dual circulation" development pattern, we will really be seeing the Chinese consumer and domestic demand taking off. So what's your long-term outlook on China's consumption power?
Wat: We are committed to reaching the 20,000-store milestone in a few years. It took us 33 years to open 10,000 stores. We have ambition and the expansion plan to open the next 10,000 stores even faster. And that's our commitment. Therefore, we are committed to investing over $8 billion for opening new stores, technology investment, or supply chain infrastructure investment. We are very excited about our opportunities in China.