30 Years Ago, KFC Opened in China — and Changed All the Rules

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I was there on Nov. 12, 1987 when the first KFC opened in Beijing, just south of Tiananmen Square in an area called Qianmen. I was an American kid living in China starved for some food I recognized. The three-story Kentucky Fried Chicken—then a division of PepsiCo and not yet called KFC—was a godsend. And because we could pay in FEC—foreign exchange certificate—we did not have to join the impossibly long lines of locals looking to get their first taste of American fast food.

KFC China 30th anniversary promotion 2017

KFC sold 2,200 buckets of chicken that first day and I watched as Chinese customers, unfamiliar with eating with their bare hands, contemplated how to eat fried chicken with chopsticks. Beijing would not welcome a McDonald’s location until 1992, when the world’s largest golden arches opened on the iconic Wangfujing shopping street. Little did I imagine that hazy Beijing day that KFC would become ubiquitous across China.

KFC is celebrating its 30 years in China with fanfare and some special deals. State newspaper China Daily published a retrospective on the brand’s success and impact, calling it the “King of Fast Food in China.” KFC China, which split from Yum! Brands in 2016, is marking the occasion with in-store promotions including throwback 1987 pricing. But it also launched one unexpected promotion: a branded smartphone.

In partnership with Chinese phone-maker Huawei, KFC China produced 5,000 limited edition KFC-red Huawei 7 Plus handsets, all branded with the Colonel’s image and pre-loaded with with 100,000 “K-dollars,” the digital currency exclusive to KFC China, and KFC/KMusic app.

KFC China / KMusic mobile app

But for me, the neatest part has been how numerous pictures from 1987 are popping up on Chinese social media like Weibo, capturing a slowly-opening China on the precipice of the modernity that would sweep the nation over the next 20 years, such as these images below:

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KFC is not alone in China, of course. The nation is now home to foreign chains of all kinds, including McDonald’s, Ajisen Ramen, Yoshinoya, Pizza Hut, Starbucks and Subway.

But KFC rules them all in terms of market share and popularity, and has written the book on glocalization—when global brands think and act locally, and adapt their businesses and offering to appeal to local customers’ needs and tastes. KFC China‘s deft localizing of its Western menu and playbook has been profiled in the Harvard Business Review.

KFC China Tmall promotion November 2017

While the menu I ate from in Qianmen 30 years ago looked little different from the one I knew in Wisconsin, today’s KFC China menu is unrecognizable to most Westerners.

KFC China breakfast congee November 2017

From congee at breakfast (above left) through lunch, tea-time and dinner, it offers items like mushroom rice, curry pork, soy milk, egg drop soup, multi-stack beef burgers, and coffee lattes to compete with Starbucks. KFC went into China looking to change it and in the process, China changed the brand.

KFC China digital ordering kiosk

Beyond the menu KFC has also embraced local tastes. The chain recently experimented with a healthy eating concept. And, in tech-crazy and mobile-pay-obsessed China, it is experimenting with tech-driven consumer touchpoints like online ordering, Tmall, a mobile app for delivery or pick-up, in-store kiosks and AI-based facial recognition payments.

KFC China mobile app

And just as KFC U.S. has been having fun with celebrities taking turn playing the Colonel, KFC China is ditching the old colonel and getting young.

Last year saw one of China’s hottest stars, Luhan, don the colonel’s outfit for a dance number. The new colonel is a young, slightly androgynous heartthrob K-pop star.

Before that, KFC partnered with K-Pop supergroup Exo-M, including launching a K-pop KFC mobile game and app. Now KFC is targeting younger women with a non-alcoholic concept drink and campaign called “Mojito Girl.

Yum! China says consumers can find KFCs in about 1,100 Chinese cities. The brand is eying another 900 smaller cities for expansion, the focus for the brand’s mainland growth in the near future. It’s a smart move—rising income in those smaller cities is predicted to drive China’s fast food market value to about $150 billion by 2020.

In 2008, then-CEO of Yum! Brands, David Novak, predicted there would someday be 20,000 KFC location in China; there are about 5,100 today.  That may seem overly ambitious, but no more so than 1,000 KFC Chinese stores did in 1987—and KFC hit that benchmark in 2004.

For more on the brand’s Chinese evolution and growth, former KFC executive Warren Liu reminisces in the video below:

 

Follow brandchannel contributor Abe Sauer on Twitter.

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