Under fierce competition, some brands have moved overseas to obtain incremental gains. And China is undoubtedly the best choice.
Editor’s note: This article is from the micro-channel public number: “BBB Institute”, Author: meow sub-meters, Editor: Li crooked.
In the spring of 2021, the first floor of Paris Spring, 939 Huaihai Middle Road.
Five Guys, a hamburger chain brand from the United States, will soon land here in Shanghai, which is its first stop in China. The store information on Dianping also quietly went online, but it is not yet open.
From 2017, Habit Burger from Santa Barbara, California, opened its first store in Shanghai Fuxing SOHO, to New York’s high-end burger Shake Shack in Xintiandi in 2019 while entering the venue with a lion dance, plus his early years McDonald’s and Burger King with roots in the Chinese market, except for the West Coast burger shop In-N-Out, and the top burger brands in The Harris Poll in the United States, almost all have flooded into China.
As a typical staple of Western fast food chains, the hamburger culture has penetrated almost every level of daily life in the United States. According to Forbes and NPD data, Americans consume 91 billion US dollars in hamburgers each year, which is more than twice the amount they consume in pizzerias.
George Ritzer wrote in “Hamburg Rule the World” that McDonald’s, an American and global icon, uses fast food culture to streamline and speed people’s dining style.
“You know that the restaurant is expecting you to leave as soon as you finish your meal. You also know that what you get is a burger that won’t go wrong, but it won’t be amazing.”
Millennials are starting to fight this way of enjoying burgers. For them, a casual restaurant offering burgers is being needed.
These expectations, of course, will not be added to established chains such as Wendy’s, McDonald’s or Burger King, nor does it include established brands like Red Robin, a restaurant that uses more high-end fresh raw materials, more social attributes and a sense of design. Space is being desired.
The research of the consulting company Technomic shows that millennials are becoming an important force in the quality and high-endization of Hamburg, and they don’t care about the high price. It is common to pay $17-19 for a lunch or dinner at a burger restaurant.
And when the U.S. burger industry reshuffle occurred around 2016, a rising emerging market is also being involved. Under fierce competition, some brands have moved overseas to obtain incremental gains. And China is undoubtedly the best choice.
Part.1
A suitable local partner
Take several typical American-style burger brands as examples. Even if they are affected by the epidemic, their expansion in China has remained unabated in recent years.
1. Wu Yitong Studio organizes according to the brand’s official website financial report, official official account, Dianping and other public information. Among them, the Five Guys Shanghai store and Shake Shack Shenzhen store are not yet open during the renovation period.
2. Strictly speaking, Popeyes is not a beef burger but a chain brand that started with fried chicken, but its fried chicken burger is also very famous. It entered China during the same period as the above brands and expanded rapidly, so it is included)
McKinsey and Boston, world-renowned consulting companies, will mention their familiarity with the market at the time when it comes to market access analysis. Especially when entering a market that is completely different from the original brand, it is difficult to deal with large and small administrative approval affairs with the government or to understand consumer preferences in detail.
Choosing an experienced local partner is an excellent choice for the brand to rapidly expand in overseas markets.
At this point, Popeyes, who will enter the stadium later, want the possibility of overtaking in a curve. It chose TFI (TAB Food Investments) as the operator in China.
TFI is a Turkish restaurant operating company. It entered China as early as 2012 and currently has more than 1,000 restaurants in more than 150 domestic cities. In addition, it is also the franchisee of Burger King China.
The parent company of Popeyes has a high degree of confidence in the Chinese market. This restaurant brand International Inc. (RBI for short), in addition to fried chicken Popeyes, also owns the Canadian national coffee Tim Hortons, Burger King and other fast food chain brands. In May 2018, RBI and Cartesian Capital Group (Cartesian Capital Group) jointly established Tims China, planning to enter the Chinese market.
Burger King and Tim Hortons, the former focuses on food and the latter focuses on beverages. One has been entrenched in China for more than 8 years and has experienced the ups and downs of fast food chains, and the other is a witness to the era of melee in the Chinese coffee market. Their understanding of the distribution of people, vacant locations, and location prices in various tier cities in China may be beyond our imagination.
Raphael Coelho, CEO of Popeyes China, believes that there is no doubt about brand synergy, “For example, in supply chain management, in dealing with developers or landlords, you can take advantage of Burger King.”
Compared to Popeyes, Five Guys and Shake Shack both chose to land in Hong Kong first and then fully enter China.
According to official information, Five Guys currently belongs to Shanghai Dibaobao Catering Group Co., Ltd., with a registered capital of US$2 million and was established on September 28, 2020. Jumbo Five Holdings Limited, established in Hong Kong, is its wholly-owned shareholder .
Compared to the earlier Habit Burger, Shake Shack has expanded at a very fast speed, which is probably due to its local partner, Hong Kong’s Maxim’s Caterers Limited (Maxim’s Caterers Limited).
In 2014, Michael Kark, vice president of Shake Shack’s global licensing business, met Michael Wu, Chairman and Managing Director of Maxim’s Group, who graduated from Brown University in the United States and is the grandson of industrialist Wu Shunde.
Maxim Group, which has been intensively farming on this land for a long time, has established multiple catering chains in China such as Cuiyuan, Maxim’s Cakes, Donghaitang, Yuanki Sushi, Senryo and Yifengtang, and spans Cantonese cuisine., Japanese cuisine and baked desserts.
Their ability to finalize and score points far exceeds that of Habit Burger.
In just two years, Shake Shack opened 7 stores in China. Judging from the location of the five stores in Shanghai, Xintiandi, Jing’an Kerry, Gateway Hang Lung and IFC are the absolute core business districts, and this location is far better than Habitt. In addition to the core of the latter’s Fuxing SOHO and World Expo stores, the Baoshan Store in Jingweihui and the Xuhui Store in Pudong are both slightly inferior.
As for the transportation hub, Habit Burger drove on Hengfeng Road next to Shanghai Railway Station and Long-distance Passenger Terminal, while Shake Shack lived in Hongqiao Airport.
According to information from Tianyan, Habit Burger belongs to Habit Restaurant Management Company, with a registered capital of 50 million, and its legal representative is Qiao Sheng. The first two main investors are Tao Chenggen and Liang Min. The latter is the major shareholder of Shanghai Laitao International Trade Co., Ltd. As for the contact information of Habit Hamburg’s joining information circulating on the Internet, the email suffix is still the English abbreviation of Laitao International.
But it is not impossible for Habit Burger to follow up.
Last year, Yum, which owns KFC, Taco Bell and Pizza Hut brands, will acquire Habit for $375 million. Although Yum China and U.S. Yum had already completed the segmentation in 2016, the experience of Yum China still saved Habitt from taking many detours.
As we mentioned in the previous article, Yum China’s most glorious performance is KFC. After the Sudan Red and other crisis events, Yum China can also bring KFC back to life and make it into the favorite Western-style fast food of young people along the way.
However, based on the current speed of the two rollouts, the first stop for Habit Burger out of Shanghai chose Hangzhou, which is also the Yangtze River Delta region, and landed in Xiyintai. Shake Shack occupied Sanlitun in Beijing and Joy City in Xidan. Advantageous location. The latter has a preliminary idea in the financial report, “We plan to expand 15 stores in southern cities such as Shenzhen and Guangzhou in China by 2030.”
Part.2
Three elements of online celebrity shops: Mini Programs, Takeaways, and Beauty
Before these American burgers went to China, they faced more than just crowded people behind them.In the local market, there is also a booming Chinese market with an unknown future.
With the resurgence of Chinese overseas students and other talents in recent years, as well as the overall upgrade of food, clothing, housing and transportation, the market for hamburgers, an American staple food, is expanding in China.
Compared with Chinese fast food, the cooking time of burgers is shorter, and it has the effect of being ready to eat and leaving. After a long time, it will not taste like noodles. The taste difference is huge. Shops appear in business districts, so the turnover rate Much higher than the others.
But the future is also unknown. “The competitive situation and consumer tastes may be completely different, requiring more investment in advertising and promotional activities, and recruitment and training of personnel are also problems.” Shake Shack described the worries of entering new markets in the annual report.
In the era of sudden changes in the Internet, China’s retail format has been greatly changed. From the last mile, food delivery has subverted the way consumers obtain food. Even the ordering, payment, pick-up and evaluation of food at the store has begun to be fully digitized.
Popeyes became very local as soon as it landed. In-store self-service ordering, WeChat scan code, membership points and discount coupons are as proficient as a local brand. The WeChat applet allows members to register and log in with one click, order information can be retained, new tastings and limited-time discounts slide around on the banner at the top.
Not only the delivery channel in the mini program, they also launched the food delivery on third-party channels, and sent customers the contact information of the rider and the real-time location in the delivery.
TFI CEO Korhan Kurdoğlu believes that the digitalization of brand operations cannot be ignored. Before the opening of Popeyes’ first store, 50,000 users have been attracted through the coupon download of the APP, and they are still surprised by this number.
Five Guys and Shake Shake also made full preparations. In the United States, they cooperated with Waitr and Uber Eats respectively. The former provides delivery services covering 600 cities in the United States, and the latter has algorithmic optimization and accumulation of delivery time and routes. After these series of tests and experiments on the whole process of food delivery, they are more calm in dealing with China’s mature food delivery system.
In addition to learning to take out and using small programs, a design-filled internet celebrity space is an indispensable requirement for a restaurant in ChinaVegetarian.
Shake Shack understands this law well. Previously in the United States, they were good at using transparent glass, green plants and metal trays for food to try to dilute the cheapness of hamburgers.
The orange and blue saturation of the fried chicken burger restaurant is very high, whether it is European or American or a small elite, as long as it appears in the lens, it is absolutely beautiful.
Becoming an internet celebrity space that allows young consumers to stay and check in. It seems that fast-food consumers’ buying and leaving is contrary to the trend, but this is an easier way to get out of the circle in China.
“Planting and pulling weeds” has become a key word in many comment posts. What’s more, a small essay with thousands of words to describe the love of the brand, “When sitting next to the familiar XX color seat, looking at the poster of XXX in the store, I can’t help but think of a burger in the midterm of Los Angeles. The day of a milkshake.”
It doesn’t matter whether the location is Los Angeles, but it must be the place where foreigners have stayed. As a sign of an individual’s youthful years more shining than others, even the burgers I have eaten are caught in the salty sea breeze of the Pacific Ocean.
Overseas parties let the brand fire first, and the masses followed suit.
Shanghai is a magical city that is extremely tolerant of new brands. Can’t fight the atmosphere of Shenzhen’s money-making team, and it can’t compare with the temperament of Beijing Xiaowenqing. In the afternoon of the working day, leisurely people are the best time to linger in all kinds of life gathering shops and Internet celebrity food tasters.
This is also doomed to the patience and curiosity of the people in this city for the new brand. When Korhan Kurdoğlu and his team were trading Popeyes, they also made it clear that they planned to first do a good job in brand positioning and increase brand awareness. On social media, they will patiently listen to consumers.
There was an episode when the first store opened in Nanjing.The top 100 people will give a small gift. A fan posted @官微 on Weibo and said that he happened to be the 101st person. As a result, the official blog generously gave TA a glass. This is indeed a good impression for new brands.
Although the family hamburger company In-N-Out has not entered China yet, it is far away in California, a sunny country, but it has already learned how to play with Chinese social marketing.
May 2019, 798 Art District on Jiuxianqiao Road, Beijing. The pop-up is only one day, limited to 300 burgers, and the line in front of Las Coffee exceeds 10 meters. The flash flash started at 11 o’clock, and some people started to get up in line at 8:30 in the morning.
Almost all American burger brands that have entered China are familiar with the three points of “Internet celebrity dots, mini programs, and takeaways.” Give them what consumers like.
Part.3
Persistence of Fine Burgers
Zero-added antibiotics, Angus beef, Roman lettuce and tomatoes purchased that day, mushroom fortress for vegetarians, plus a milky smooth milkshake, American burgers insist on high-end ingredients. Highlight your own high-end constantly.
This high-end is also reflected in the menu and service boutique. In addition to ordinary soft drinks, you can also provide Paris water, apple juice or alcoholic drinks; not only hamburgers, but also rice that is more acceptable to the Chinese. Brands are racking their brains to retain consumers.
Five Guys, who just entered the game, have a strict procurement process. Jason Lee, senior director of international supply chain, said in an interview that even if it plans to enter 6-8 new countries every year, Five Guys has complete control of the supply chain, including procurement, logistics and distribution.
This strictness is not only reflected in the staple ingredients such as potatoes and beef, but also the supplementary ingredients used in the restaurant.Materials such as napkins, packaging bags and beverage cups are also very strict.
This sounds a bit of a waste of money or even fantasy-for example, some products may be produced in Asia, they will be shipped to the other side of the Pacific, and then distributed from the United States to various countries. “The money we spend on napkins is 8 million U.S. dollars each year.”
Similarly, Shake Shack, including all international franchise stores in China, imports major raw materials from the United States and the United Kingdom. Beef patties and their raw materials come from the United States, Australia and Uruguay, and the well-known big mushrooms come from Britain and the United States. In addition to Turkey, Japan, South Korea and China, custard is also produced in the United Kingdom and the United States.
These persistence in raw materials and supply chain are the core of the long-term development of the brand.
The Ipsos report shows that 85% of consumers pay more attention to healthy eating than in the past, which coincides with the “freshness, no additives, and direct harvest from the farm” promoted by American burger restaurants.
Although more than 50% of people think that Chinese foods such as congee, rice and noodles are healthy staple foods, only 21% think that burgers are healthy staple foods, but when they actually choose, more people will choose Western fast food.
In addition, there is still a broad market for high-priced Western-style fast food. The report “Consumers’ Behavior Preferences for Chinese Fast Food” pointed out that the working class is currently the main group of Chinese fast food, and RMB 40 is the price sensitive line of Chinese fast food. This has led to more white-collar workers, students, and the overseas parties I mentioned earlier, which are likely to flock to the Western-style fast food market, such as high-end burgers.
Data from the National Bureau of Statistics and the China Commercial Industry Research Institute show that although the Chinese food market accounts for the largest proportion of China’s catering industry, in recent years, the Western food market has grown rapidly. In 2019, the Western food market reached 711.2 billion yuan, accounting for 15.2%.
TFI, the operator of Popeyes, has also done research. After the epidemic, people may be more inclined to choose modern Western-style chain fast food restaurants. They think “PopeyThe market segment where es is located has grown at a rate of 10% or even 15%.” Therefore, it is planned to add 1,500 new Popeyes restaurants within 10 years.
Shake Shack is also highly enthusiastic about the Chinese market. According to the plan disclosed in the financial report, before 2030, there will be 55 brand stores in China.
Habbit Burger has targeted Asia. They have landed three stores in Cambodia and plan to enter the Korean market. Five Guys, who had just landed, were anxious to find someone, and the job advertisements were all printed on the decoration cloth outside Paris Spring.
The battle for the taste buds of American burgers from China to Asia has just begun.