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Bloomberg
Hong Kong KFC’s partnership with an Alibaba affiliate puts the pressure on the Golden Arches in China more than ever.
By allying with a backer of the country’s top food delivery website, KFC owner Yum Brands has taken a step toward solving the dilemma of slowing growth in its biggest market outside the US. It’s a deal that McDonald’s, which is also in the throes of selling its China business, will do well to match.
Yum and McDonald’s are among a clutch of Western brands that have realised they need a Chinese partner to stay on top of shifting consumer tastes in the nation. The price of not getting that strategy right has meant retreat in recent years for brands from Tesco and B&Q to Best Buy.
For McDonald’s and Yum, both of whom have been hurt by food-safety scandals in China, the challenge is not only to improve their reputation, but also to stay on top of a move toward healthier foods, capitalise on consumption growth in smaller cities where they have little presence, and most importantly, join the Chinese rush to perform ever more daily tasks online.