Chinese fast food firms such as Dicos, Country Style Cooking and Kung Fu Catering have been challenging McDonald’s and Yum Brands by introducing inexpensive, healthy and local-flavored meals in China’s $174 billion fast food market.
According to a recent report by SCMP McDonald’s and Yum Brands are still the largest fast food chains in China but despite heavy investment, they have seen their market share stagnate due to the local competition.
“I’m a bit sick of Western fast food. There’s too much oil, and you hear things like chickens having six legs, health concerns have really made people worried.” student Tang Mei was quoted as saying in the SCMP report.
Taiwanese-based Dicos is the third largest fast food brand in China plan to triple its store to around 3700 by 2020 as it aims to break the traditional Western fast food mold.
The rise of food quality issues has contributed in the international brands’ declining popularity. Only one in four Chinese people thought Western fast food was healthier and of better quality than Chinese alternatives, said a recent report from Mintel.
Pricing has also been a major factor. Lunch at Dicos costs less than 17 yuan compared with a similar offering from KFC, which costs 25 yuan.
“Local establishments generally also do a better job catering to local tastes,” said Karla Wang, associate research director at market research firm TNS China.
Kung Fu Catering that has Bruce Lee as its brand logo, is famous for its Chinese style fast food and the use of natural ingredients.
Others such as Country Style Cooking, CNHLS and Gll Wonton, owned by Shanghai Shihao Catering, all offer fast food with a Chinese flavor and are gaining a huge market share.