Book review: ‘KFC in China’ and its ‘Secret Recipe for Success’
When Kentucky-based KFC Corporation becomes a leader in China’s fast food industry, you know there has to be a story. Warren Liu’s “KFC in China: Secret Recipe for Success” enlightens readers on the strategic efforts that propelled the American fast food giant towards success in the communist nation—they are the largest restaurant chain in China with over 3,500 stores, beating even McDonald’s.
Given the rapidly changing economic environment in China, foreign companies have a tough time competing with local businesses.
Chinese companies have the upper hand with their governmental connections and native knowledge of navigating China’s tumultuous business landscape. Readers receive a firsthand glimpse of the trials and successes that Liu, former business development vice president of Tricon Greater China (the previous parent company of KFC), witnessed as a pivotal figure to KFC’s launch in China.
KFC was a force that swept the country and changed the face of China’s restaurant industry. The corporation introduced novel concepts and a new model of quick service restaurant that previously never existed. The KFC outlets were cleaner, and systematically and mechanically more efficient in terms of food prep, business management and operation. However, those are not the only reasons for their success. The pioneering KFC holds the advantage of entering the market early in 1987, three years before McDonald’s. Starting out in Beijing was a shrewd move as well because of the city’s position as the political and cultural capital of China.
Understanding China historically is key to working in the country, because the nation’s history has shaped the present attitudes and actions of its people. Therefore Liu’s brief synopsis of China’s history— from the Opium War in 1840 to highlighting China’s move towards a free market economy–is valuable for analyzing consumer mentality. There are several elements of KFC that makes it appealing to the Chinese. The colonel mascot resonates with a country where respect for the elderly is a large part of their culture. Another example is that excluding pork, the Chinese prefer chicken over all the other meats, according to Liu.
Liu’s writings gives us a peek into the Chinese mind, which is interesting because of how much it differs from Western ideology. The locals view KFC as more of a special occasion dining experience rather than a fast food outlet because of the price and ‘fancy’ setting. Because of the contrasts in mindset, part of KFC’s success lies in the Taiwanese management team they started out with. Affectionately calling them the “Taiwan Gang,” Liu noted that the team was made up of Taiwanese who spoke Mandarin and understood the culture due to their ethnic roots. At that time, ethnic Chinese from Singapore and other neighboring countries did not have strong Mandarin skills. In addition, the “Taiwan Gang” had years of fast food experience under their belt, many of which come from McDonald’s.
Published in 2008, Liu’s book is slightly dated. Much has changed since then and fourth quarter results reported that same-store sales in Mainland China have dropped for the third consecutive quarter. Analysts are saying that an over-saturation of Western food in China is possible and the company needs to watch out for increased competition from local rivals, according to Business Week.
