Life
UPDATED: 10:06, October 29, 2004
Pizza Hut converts Chinese youth to western tastes, prices
Zhang Xianrong felt a little uneasy when she picked the fork and knife for her first-ever taste of pizza -- in celebration of her 25th birthday with her boyfriend Li Wenhua.
"Though the pizza is nothing special, I like the setting here because exotic romance is everywhere," said Zhang, who now works for a Beijing-based foreign-funded company. "
As more young Chinese people chase foreign fashions and lifestyles, interest in Western food such as McDonalds and Kentucky Fried Chicken grows.
Yum! Brands Inc. first introduced its first chain restaurant in Beijing in 1990. Now Pizza Hut is opening its 148th store in China's westernmost Xinjiang Uygur Autonomous Region. After 10 years of expansion, the red huts are in downtown areas in 40-plus cities in eastern and central China.
At Pizza Hut, customers spend at least 62 yuan (about 8 US dollars) on average for a pizza, hardly affordable for ordinary Chinese who earn about three dollars a day.
Yum! Brands' efforts to create a huge pizza-loving population aged between 25 and 35 in China may prove a difficult goal. The average annual income of Chinese urban residents in 2003 was 8,472 yuan (approximately 1,020 US dollars), while in the United States it was 35,696 US dollars, according to statistics from China National Bureau of Statistics and US Department of Commerce.
This makes the US-import a pricey treat.
With a vast population of 1.3 billion and a long history of loving delicacies, China is seen by a large number of international food giants to have a huge market for restaurants. As the Chinese Ministry of Commerce predicted, the total sale of Chinese restaurant industry in 2004 will reach 720 billion yuan (about 86.7 billion US dollars), up some 18 percent over last year.
"I am pleased to report...our two most profitable markets, China and the United Kingdom, increased system sales in local currency terms by 35 percent and 9 percent respectively," David C.Novak, Chairman and CEO of Yum! Brands, Inc., said at a recent conference in early October.
Unfazed by the challenge from Western food giants, Chinese traditional restaurants and hotels noted that they are braced for the competition.
"Though the overseas fast food chain stores are thriving in recent years, they have not succeeded in jeopardizing the existence of local Chinese catering industry," said He Zhifu, secretary-general of Beijing Catering Industry Association, "Because they have different target consumers, tastes, and food categories."
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