Ni Hao, Hamburger King: Why Burger King is Playing Catch-Up in China

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Many more Chinese consumers are about to be able to have it their way, as Burger King has announced an “accelerated” expansion in China, planning 1,000 new locations via a new joint venture in the next five to seven years.

Some are wondering if The King might not be offering too little, too late. The question should be, what way, exactly, do the Chinese want it?[more]

As a matter of trivia, Burger King is one of the few Western fast food transplants to boast a Chinese name with a literal translation. Where the brand names of McDonald’s, Subway, Pizza Hut, Starbucks, KFC and others have strategically clever, or legacy translations, Burger King’s Chinese name is 汉堡王, which translates, quite literally, to “Hamburger King.”

As another matter of trivia, Burger King (with 63) has 1,437 fewer locations in China than McDonald’s. That is 3,737 fewer than KFC. So Burger King’s announcement that it plans to open 1,000 restaurants in the nation means it will have 493 more locations than Starbucks. Of course, by the time Burger King opens all 937 more of those locations in China “over the next five to seven years,” it will have 500 fewer locates than Starbucks (which plans 1,500 locations by 2015. Meanwhile, McDonald’s plans to double its workforce by 70,000 by next year alone.

Burger King’s China expansion is being characterized as “aggressive,” even though it will leave the chain far behind its peers in terms of overall distribution. But positioned right, Burger King’s late entry and expansion may be perfect timing.

McDonald’s opened its first location in China in 1990 in the wild west Hong Kong border town/”special economic zone” of Shenzhen. It came three years after KFC’s epic first location in Tiananmen Square, a football field from Mao’s mausoleum.

By comparison, Burger King’s first China location did not open its doors, in downtown Shanghai, until 2005. Even then, conventional wisdom was that it had a lot of work to do to catch up to McDonald’s and KFC.

Burger King has expanded faster than McDonald’s since then. BK increased its reach 60-fold in four years (one location to 63) while McDonald’s managed to only go from 600 in 2008 to 1,500 today, a measly 300 percent increase.

But sheer numbers alone do not predict success. In a nation where “our beef is free of ammonia!” is part of a brand’s messaging, a brand’s success can change in an instant. China’s fears about food quality also offer a unique opportunity for a brand like Burger King.

Depending on how it positions itself, Burger King may find itself as much a competitor with the Golden Arches as with a more upscale brand like Starbucks. China is prime for a low(ish) end fast food brand that promises — guarantees — high food quality.

The danger, of course, is that product control would be paramount. One or two scandals could sink the chain for years in China. So, is The King ready to gamble — which is illegal in China, by the way?

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