The US Fried Chicken restaurant chain Popeyes has been trying to expand its operations in China by announcing plans to open 1,700 restaurants throughout China over the next decade, taking on established competitors like KFC and McDonald’s.
The aggressive growth strategy results from the acquisition of a sister company that boasts an experienced mainland team and a well-tuned store development platform and was made the sole owner of the restaurant in Louisiana. Brand.
It also highlights the increasing demand for the world’s fast food chains to capture an enticing slice of the vast Chinese consumer market following the country’s oppressive COVID-19 regime earlier in the year.
“China remains a very important market for the brand to expand its presence,” Jason Ge, general manager of Popeyes China, told reporters at a press conference on Wednesday. “We are hoping to connect with people who share the same interests with our restaurants. We want our customers to be delighted at our menu, design and even the music.”
Popeyes reopened its store in the crowded Middle Huaihai Road in Shanghai on Saturday, only four months after the company closed its nine outlets in China after a massive change in its business model. Fast food restaurants first arrived in China three years ago with great fanfare.
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Customers stood in line for more than eight hours to get an opportunity to taste the famous fried chicken during the grand opening ceremony of Popeyes’ Shanghai store in May 2020.
Tim Hortons China – known simply as Tim in the market of mainland China is the operator of Tim Hortons China, a Canadian doughnut chain and coffee company that has opened more than 600 stores in China. It has taken over Popeyes China in March as it aimed to expand its market with both brands.
Tims is a joint venture formed by the private equity company Cartesian Capital Group and Restaurant Brands International, which owns Tim Hortons, Burger King, and Popeyes.
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Popeyes plans to open ten stores within Shanghai in the coming year. and to increase the number of outlets to 70 by 2024.
In 2025, it plans to expand its reach by adding around 100 outlets as it expands its geographical coverage to include over a dozen cities on the mainland.
The company plans to operate 500 outlets across the continent within five years, of which 180 will be franchised stores.
Popeyes currently has 4,100 locations around the world.
Lu Yongchen, chief executive of Tims China, told reporters that the two brands would collaborate to grow China’s business. At the same time, they build their supply chains, carry out their digitalization strategy, and increase awareness of their brands.
“The reopening of China’s economy [after the pandemic] heightened global fast-food giants’ hopes that they can regain growth momentum in the world’s largest consumer market,” said Chen Xiao, chief executive of Shanghai Yacheng Culture, a marketing and branding firm.
“Restaurant businesses appeared to recover quickly in cities like Shanghai, although it will still take time to revive the country’s stalled economy.”
In Shanghai, the total expenditure for dining out and hotel stays was up 42 percent over the previous year to 19.36 billion Yuan (US$2.66 billion) during the first half of 2023. That’s a massive difference from a 9.7 percent increase in local gross domestic product over the same time.
According to data company YuboZhiye Information Technology, China’s fast-food market could reach 1.5 trillion yuan by 2024, up 70% percent from the total revenues of 89 billion yuan in 2017.
Yum China Holdings, which is the owner of KFC and Pizza Hut, the KFC as well as Pizza Hut restaurant chains in China mainland, China is expected to invest US$900 million to open 1100-1300 restaurants this year, its head of finance Andy Yeung said in February.
Tims China announced in March that Popeyes China has US$30 million of cash in reserve to expand its business in China and promoted that it will allocate an additional 60 million to build business for the brand’s fried chicken in the world’s biggest consumer market.