McDon­ald’s bets big on ‘dig­i­tal’ growth

Global fast food chain to open 250 new out­lets in smaller cities

China Daily (Canada) - - LIFE - ByWANG ZHUOQIONG wangzhuo­qiong@ chi­

Global fast food chain McDon­ald’s said onWed­nes­day that is set­ting up 250 new out­lets mostly in lower tier cities and step­ping up the pace of its dig­i­tal ex­pan­sion in China this year.

The com­pany, which is still re­cov­er­ing from a July 2014 food safety scan­dal, said it hoped the new moves will help at­tract more cus­tomers to its fast-food out­lets.

McDon­ald’s un­veiled the first of its “Ex­pe­ri­ence of the Fu­ture” restau­rant on the Chi­nese main­land on Wed­nes­day in Bei­jing’s Wang­fu­jing shop­ping district. The out­let will cater to the core din­ing needs of cus­tomers and of­fer dig­i­tal, per­son­al­ized and cus­tom­ized ex­pe­ri­ences, said Phyl­lis Che­ung, CEO of McDon­ald’s (China) Co Ltd.

A sim­i­lar out­let will open in Shen­zhen later this year, she said. China is al­ready McDon­ald’s third largest mar­ket glob­ally, with 2,230 restau­rants in the coun­try.

Che­ung cited brand recog­ni­tion, good value and con­ve­nience in terms of de­liv­ery ser­vices and break­fast prod­ucts as key growth driv­ers for last year.

This year, McDon­ald’s will also upgrade its 150 Cre­ate Your Taste restau­rants in first tier cities with dig­i­tal ser­vices and do-it-your­self burg­ers.

At the Wang­fu­jing

store, the com­pany has teamed up with WeChat, the in­stant mes­sag­ing ser­vice from Ten­cent, to of­fer mo­bil­ity so­lu­tions to cus­tomers. Th­ese in­clude or­der place­ment, se­lec­tion of items from the cus­tom­ized burger menu, ta­ble book­ings and an off­line game space.

The two-floor restau­rant has a sim­ple and plain de­sign fea­tur­ing look­throughs and open spa­ces. The WeChat al­liance also en­ables cus­tomers to use game cred­its for re­deem­ing restau­rant vouch­ers.

Terra Xu, a re­search an­a­lyst atMin­telGroupLtd, said Chi­nese cus­tomers are will­ing to pay more for a bet­ter con­sumer ex­pe­ri­ences.

Due to a se­ries of food safety prob­lems be­tween 2012 and 2014, China’s fast food mar­ket has seen a sig­nif­i­cant drop in growth. McDon­ald’s big­gest ri­val in China Yum Brands Inc, the par­ent of KFC, Piz­za­Hut and Taco Bell, di­vested its China busi­ness into a sep­a­rate com­pany last Oc­to­ber.

How­ever, Min­tel’s new re­port “Fast Food — China 2015” re­veals that in 2015, the to­tal value of the coun­try’s fast food mar­ket was es­ti­mated at 690 bil­lion yuan, up 8.5 per­cent from a year ago.

A grad­ual re­cov­ery is ex­pected in the next five years. By 2020, the to­tal num­ber of out­lets is ex­pected to reach 950,000, with com­pound an­nual growth of 8 per­cent.


A cus­tomer shows a self-made burger at McDon­ald’s first Ex­pe­ri­ence of the Fu­ture restau­rant in Bei­jing.

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