The US fried chicken chain Popeyes is making a renewed push in China with plans to open 1,700 outlets across the mainland in the coming decade, as it takes on a clutch of established rivals like KFC and McDonald’s.
The aggressive growth strategy comes after a sister company with a strong mainland team and well-honed store development platform became the exclusive operator of the Louisiana-based restaurant brand.
It also demonstrates the growing desire of global fast food companies to grab a slice of the gigantic Chinese consumer market after the country emerged from its stifling Covid-19 regime earlier this year.
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“China remains a very important market for the brand to expand its presence,” Jason Ge, general manager of Popeyes China, told reporters in a media briefing on Wednesday. “We hope to connect people with the same interest in our outlets. We hope our customers will be impressed by our food, decor and music.”
Popeyes reopened its first store on the bustling Middle Huaihai Road in Shanghai on Saturday, just four months after it closed all nine of its outlets in China following a major business revamp. The fast food chain operator first landed in China three years ago, to much fanfare.
Dozens of customers waited in queues of up to eight hours for a taste of the signature fried chicken at the grand opening of Popeyes’ Shanghai store in May, 2020.
Tim Hortons China – known simply as Tims in the mainland market – operator of the Canadian doughnut and coffee chain that has already opened more than 600 outlets on the mainland, took over Popeyes China in March as it pursued strong growth for both brands.
Tims is a joint venture between private equity firm Cartesian Capital Group and Restaurant Brands International which owns Tim Hortons, Burger King and Popeyes.
Popeyes aims to open 10 outlets in Shanghai this year, increasing that number to 70 in 2024.
In 2025, it hopes to add about 100 new outlets as it expands its geographic footprint to more than a dozen mainland cities.
The brand anticipates running 500 stores on the mainland in five years’ time, of which 180 will be franchise outlets.
Popeyes currently operates 4,100 outlets worldwide.
Lu Yongchen, chief executive of Tims China, told reporters that the two brands will work together to expand the mainland business as they continue to build their supply chains, execute their digitalisation strategy and promote brand awareness.
“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 company.
“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, total spending on hotels and dining out soared 42 per cent on the year to 19.36 billion yuan (US$2.66 billion) in the first half of 2023, compared to 9.7 per cent growth in local gross domestic product during the same period.
According to data provider YuboZhiye Information Technology, the size of China’s fast food market will top 1.5 trillion yuan in 2024, up 70 per cent from total revenue of 89 billion yuan in 2017.
Yum China Holdings, which owns the KFC and Pizza Hut restaurant chains in mainland China, will spend US$900 million to open another 1,100 to 1,300 stores this year, its chief financial officer Andy Yeung said in February.
Tims China said in a statement in March that Popeyes China has US$30 million of cash on hand to pursue growth in China, adding that it will earmark an additional US$60 million to develop business for the fried chicken brand in the world’s largest consumer market.
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