KFC's big bet on Asia
- By Mitchell Blatt
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E-mail China.org.cn, July 10, 2015
Their ownership structure in Myanmar is different from their Chinese strategy where most of their stores are owned by the company itself, which gives KFC a lot of control over its operations. Going into Myanmar, they are partnering with Yoma Strategic Holdings, a Singaporean company that already has experience in Myanmar. Yoma has built residential developments, office complexes, golf courses, and "Myanmar's First Gated Community."
Opening first in Myanmar means KFC has first mover's advantage there, too. KFC had been planning on opening up in Myanmar since at least 2013, according to press reports. For years, Myanmar was off limits to American companies due to sanctions. Pepsi and Coke recently re-entered the market after more than a decade each of absence. But KFC isn't the first foreign fast food joint; South Korea's Lotteria, which serves burgers, opened in 2013.
One thing about globalization is that even if the brand above the door is the same, the cultural meaning is a lot different in different places. Evidence of that fact is this quote uttered by businessman Kyaw Moe, who was quoted in an AFP story saying, "It is internationally famous, so I think it must be healthy."
Deep fried chicken and fries a health food? There are 610 calories and 32 grams of fat in a Spicy Big Crunch on the American menu. But it just goes to show how different brands can look overseas. I always wondered why Chinese people often drink Budweiser at trendy bars when it's the cheap swill of America.
KFC tries to advance its own image of being "healthy." The Harvard Business Journal article noted its campaign in 2005 to create "new fast food" that is "healthy and balanced" by eliminating supersize meals and adding more vegetable dishes.
KFC and Pizza Hut (also a Yum brand) are fast and quick in America, but they try to portray an image of higher standards in China. Some Chinese boys and girls even go on dates to Pizza Hut and drink wine.
Myanmar has its own fast food, too. Deep-fried insects, sugarcane juice, and curry swimming in oil are popular in small tea houses. That kind of food is terribly unhealthy, too. It is locally unique, which appeals to foreign tourists, just as the foreign brand image of KFC appeals to local urbanites. The local meals are also much cheaper. Fast food can't compete on price in developing countries like it does in America.
To quote the businessman again who waited in line on opening day: "My aunt in Singapore says it is also famous there."
Someday KFC will be ordinary in Myanmar and the rest of the developing world. KFC's CEO said in 2013 that they were planning on opening 20,000 new restaurants in the developing world by 2020, half of how many they already have in the entire world.
The author is a columnist with China.org.cn. For more information please visit: http://www.china.org.cn/opinion/MitchellBlatt.htm
Opinion articles reflect the views of their authors, not necessarily those of China.org.cn.
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