Helen Wang: How Burger King Can Recover in China

Helen Wang, award-winning author and expert on China’s middle class, wrote for Forbes an article on how Burger King can recover in China. You can read it entirely here

Helen Wang

Eight years after Burger King first entered the China market in 2005, the world’s second largest burger chain restaurant has only 63 restaurants in the country, falling far short of its own plan of opening 250 to 300 restaurants by 2012.

[…] Here are a few things Burger King can do to catch up:

Myth that Chinese Don’t Eat Beef

Burger King has failed to play up the advantages of its traditional beef dishes. Instead, it added chicken burgers, believing Chinese prefer chicken to beef. The reason many Chinese consume more pork and chicken is because they are more affordable and readily available. Chinese farmers typically raise pigs and chickens to sell in the market, while cows are used mainly for farming.

[…]

Burger King could re-invent its Chinese menu with smaller burgers, such as a tapas-sized burger, and with more dish varieties to include crab, fish, or even tofu burgers. It could also add beef tendon dishes and ox tail soups. With some sensitivity, Burger King could also introduce cheese burgers as a western dining experience. Although Chinese eat very little dairy products, the ones who have tried it usually like it. This would set Burger King apart from McDonald’s, and attract young and trendy, as well as sophisticated, diners.

Individualistic Youth? But Not So Much

Burger King’s targeted demographics are younger, more individualistic diners in big cities. They believe these restaurant-goers would want to set themselves apart from their family members or colleagues. […]

This is where Western companies often get it wrong. Yes, younger Chinese are becoming more individualistic. But they are not becoming as individualistic as their Western counterparts. Chinese culture is more collective. The pressure of fitting-in is extremely high.Many people I talked to dine out at least three times a week – with their friends, colleagues and families. They would not want to set themselves apart from their friends and colleagues.

[…] Sometimes, by simply keeping the locations clean, brightly lit, and air-conditioned, they can set themselves apart from competitors. This is one of the major reasons that many young Chinese have their first dates at Starbucks and hold their weddings at KFCs.

Don’t Run the China Operation from Outside China

When it first entered China in 2005, Burger King hired former McDonald’s president of greater China Peter Tan as senior vice president and president of Asia Pacific. This was a good choice as Tan has extensive experience growing McDonald’s to over 1,000 restaurants. However, there was one problem: Tan was based in Singapore. Headquartering the China operation in Singapore was a mistake that could be detrimental to Burger King’s China strategy. […]

China is an extremely complex market with diverse conditions. One thing companies must absolutely avoid is to run the China operation from outside of China. You can’t even run the China operation in Hong Kong or Macau. The management team must be on the ground to understand local customers and the fast-changing business landscape.

The Chinese middle class is now approaching half a billion. Four-fifths of Burger King’s new restaurants are opening outside America. The Miami-based US fast-food giant needs to recoup its China strategy, and execute its Go Forward Plan with speed and focus in order to succeed in the world’s most populous country.

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