American fast food in China - Essay Example

American fast food in China Introduction of fast food in china took place in 1987 when the first KFC fast food restaurant was opened. These foods contain a lot of sugar, salt, rich in protein diets and are heavy in fat. However, a large majority of Chinese choose to eat at fast food restaurant especially, ones from the United States, because they tend to consider these eating behavior as something to aspire and be proud of. A majority of Chinese people have gone to a point of seeing this new eating trend at Pizza Hut, McDonald’s KFC, and Starbucks as an attractive one thus considering this habit as a symbol of status. What these people fail to see is that these foods are particularly high in fats and sugars. Those in China and do enjoy this fast food have been suggesting that fast food meals are actually appealing but the effects that this fatty food bring in long run are bad. The number of people in China that are gaining extra pounds each day shows that fast food is continually growing popularity in China. This research seeks to explore reasons that have led to American fast food getting huge benefits in china, the difference between the fast-food restaurants in America and in China, and how these restaurants have changed their business models in China. In addition, this research will also look at how different fast-food restaurants have changed over time, how these changes have influenced the American economy and global business, how these fast-food restaurants from America have influenced China and their economy at large. The fast food restaurant that dominates the Chinese market is actually KFC. However, McDonalds is the easily recognizable Fast-food brand in China. KFC has got the largest chains of fast-food restaurants in China with approximately 4000 fast-food restaurants. These restaurants are both domestic and foreign brands. The founder of this fried chicken chain of restaurant, Colonel Sanders, is one of the most recognized American faces among the Chinese. This chain of fried chicken restaurants is now owned by Yum brands. There have been emerging scandals that have been aired in relation to the excessive levels of antibiotics that have been used by American fast-food restaurants in China. Brands like KFC and McDonalds have been held responsible with claims that they have led to an epidemic of obesity in China. This weight gain can also be linked to the Chinese breakneck development. Other developing nations are rapidly undergoing an economic transition but China seems to be dragging behind as a result of a large majority of people gaining weight thus cannot manage to work properly to build the nation. The number of obese people in China grew from 18 million to 100 million in 2005 and 2009, whereas its national GDP doubled at that same period. However, it is quite surprising that even though China is known to have a population that eats a lot, the situation tends to be worse because China is considered to have another problem of having a malnourished nation. Other nations that experience the same are Vietnam and India. Diseases that are caused by consumption of excess sugar and fat have become popular in China. These diseases include high blood pressure, heart diseases, and Type 2 diabetes. An estimate of 9.7 per cent of Chinese country have diabetes especially, Type 2. This data is close to the findings of America which are 11 per cent of the total population. These findings were from a study conducted by New England Journal of Medicine. There are various reasons which have made the contribution towards the realization of massive profits by American fast food restaurants in China. This paper concentrates on the reasons as to why these changes have occurred and why they happen as they do. A lot of research has been done in an effort to investigate this phenomenon and Smith (2006) notes that localization of meals is what has contributed to the attraction of native customers in the foreign country. Localization of meals denotes that these companies have slight variations in their meals in such a way that they appeal to the Chinese customers as they have a connection to their native culture (Smith, 7). According to him, the high profit that McDonalds is experiencing is as a result of the various restaurants that the company has, in China as well as the rest of the world. It is also evident that more profits are made from abroad rather than the restaurants in America (Smith, 7). All over the world, localization has been very successful, not only in China, but also through out the world. The fact that these American fast foods are most appealing to the busy and upwardly mobile middle class of the society is a reason that Smith attributes to the huge success of this companies. These restaurants are also renowned for their cleanliness, neatness and efficiency. In addition they have good public toilets and their services are reliable (Smith, 7). Food in the American fast food restaurants is relatively cheap when compared to the local eateries in China. It is important to note that the operations of these companies are highly associated with the United States and this serves to promote their businesses (Smith, 6). Initially, it was hard for the American companies to convince the Chinese that their food was good. Hsu (2008) attributes this to the fact that Chinese people were already contented with their traditional food. China was a hard market to penetrate unlike other foreign markets. This is because other markets liked American products and their brands hence easily embracing the American culture. Companies that were successful in penetrating the Chinese market had to make adjustments in their menus so as to make a connection with their clientele through their meals (Hsu, 200). A good example is that of KFC and the Yum! brands. Both companies had to introduce local variations of their pizza and chicken as well as the chicken wrap in pecking duck sauce. These meals are some of the most common menus in china and have contributed significantly to the large profit margins experienced by these companies (Hsu, 200). Not all American fast food companies that ventured into china were successful in their businesses. Hsu gives Starbucks as an example as it purely majors in coffee, a drink that the Chinese people hardly consume when they are compared to Americans and Europeans. The secret to succeeding in the Chinese market is to ensure that a company is a lifestyle company (Hsu, 200). However, according to Talwar (2009), these American fast food companies do well is because of the approach they use when engaging in business. To illustrate her point, Talwar gives the example of the general manager of McDonalds who once had ownership of a Chinese restaurant that won an award. Due to his experience, he was the best suited person to manage a McDonald’s restaurant, as well as be the catch for the Chinese clientele (Talwar, 25). As their corporate, social responsibility, these Americans include the local communities around them in their activities. For instance they involve the neighboring schools in promoting and arranging their school trips and having birthday parties for the students. They also plan for weddings of local community members in order to fully integrate in the local community. Inclusion of Chinese cuisines in their menus is to ensure that their flow of customers remains steady. Their strategy is to appeal to children and young adults who will bring in the adults who have the money, and so they are able to make profits and sales (Talwar, 25). According to the Forbes magazine in 2012, Yum brands which owns KFC (Kentucky Fried Chicken) and Pizza Hut dominates the Chinese fast food market with McDonald’s close behind. According to CNN Money, the most successful United States consumer company in China generating half of its overall revenue from China is Yum! Brands. It is no secret that the American companies have dominance of the market in China. Research shows that the Chinese would chose to have their traditional cuisines given the time and choice. Acting upon this research, American fast food restaurants make the local cuisines accompanied with American dishes, and these appeals to many of the clients. Chinese citizens are busy and work long hours. For this reason, many of them prefer the most popular and most efficient food providers whose services are also good. The American fast food companies easily fit this description and thus make them the restaurants of choice for the Chinese people. China has a very high population and this provides a large market for the American fast food companies. As a result, this creates an opportunity for making massive profits for these American companies. With multiple chains the world over, and coupled with years of experience, these companies thrive in the competitive market. Before opening up a business anywhere in the world, these companies do their research, and invest in advertising. It is no wonder that majority of the people living in urban areas are aware of their products and services even before they can access them. These fast-food restaurants tend to have a behavior or tendency of making sure that they involve the population that they serve or the nearby communities in their activities and thus becoming a part of them (Talwar, p 25). What these American fast food restaurants do is that they plan and allow their customers parties such as engagement parties and weddings. In addition, these restaurants also arrange for school trips for the surrounding schools in the region of operation and thus making them to act not just as a fast-food restaurant but also as part and Parcel of the community that they are serving. Their experience is based on the fact that these fast-food restaurants have been in most parts of the world doing business. Furthermore, a large majority of Chinese citizens are aware of the American fast-food restaurants such as KFC, McDonalds, Pizza Hut, Subway, Dunkin’ Donuts, and Starbucks as a result of Globalization. It is essential to also note that many American Fast-food restaurants have continually been making a fortune in China because of their history of being sparkling, resourceful, and refined. These wonderful features have enabled these fast food restaurants to gain more support from both middle class and upper class Chinese citizens thus making these restaurants to rip more benefits from China. The association that these Fast food restaurants in China have with the United States has enabled them to be highly considered as out of the ordinary exports of America to the rest of the world. These features have portrayed an image that these chains of restaurant symbolize safety, familiarity, modernity, connectedness, convenience, fun, sanctuary, and culinary tourism to the rest of the world. The Chinese younger generation view American fast food from a totally different perspective. They view fast food as a representation of affluence and innovation and as a way of reflecting what they tend to consider as the good life of the Americans. However, a number of critics have considered this move by the American fast food restaurants to dominate other parts of the world as a bloated lifestyle in America and an American way of taking over the world (Smith, p 7). The main reason as to why American Fast food chains of restaurants have made a fortune in china is as a result of localization. Localization is the introduction of the Chinese cuisines in the menus of the fast food Chinese outlets. The Chinese have over the past years preferred their traditional dishes over other dishes that are introduced to them. This contentedness with their local dishes is the reason why American fast food restaurants in China have considered introducing Chinese cuisines in their menus. This Chinese culture has caused America to have a hard time trying to penetrate the Chinese food market like they have been doing in other parts of the world (Hsu, p 200). However, there has been a tremendous change after these American fast food restaurants agrees to localize their menus. For instance, incase a family enters a fast food and their children want to have burger and their parents prefer local cuisines, everyone will be served with the dish of their choice under one roof. These make the restaurants to maximize their profits because they sell their food to every Chinese citizen regardless of the age or gender. In addition, despite having localized their menus these restaurants are considerably cheaper as compared to the local restaurants that are of the same standards. Furthermore, increase in income of the Chinese citizens has also chipped in to increasing and changing the eating habits of the Chinese citizens thus allowing them to try new combinations and thus making American fast food industry to thrive in china (Hsu, p 200). American Fast food restaurants that have adopted the localization of their menus as a result of studying and understanding what the Chinese citizens wants, have thrived from their Chinese outlets. Fast food restaurants such as Pizza Hut, Taco Bell, KFC, McDonalds, and Yum are chains of restaurants that are operating in China. However, the most preferred fast food restaurant by the Chinese families on a weekly night out is KFC. As a result of high demand of fast food in China, Yum has been opening three new restaurants every day. The success is as a result of its ability to come up with localized menus such as localized variation of pizza and chicken that are preferred by the Chinese families. In addition, Pizza Hut serves Crab sticks, sea eel, and tuna as toppings throughout china thus making many Chinese families to dine there. For a food company to do well in China it must be able to embrace the Chinese culture and their cuisines as well. In addition, it has to be fast in service delivery and ensure efficiency, cleanliness and keep up an image that will appeal to its clients. The American fast food companies have a commitment to serve the Chinese population the dishes that appeal to them. They have also created their eating spaces to be larger than the normal Chinese restaurants and for this reason; they have flourished and retained many customers. In addition, they ensure that their advertisements relate to the Chinese population in order to acquire and maintain a large client base (Hsu, 100). American fast food restaurants in China have lifted the standards in the industry. Local restaurants are imitating the American fast food restaurants and this makes China look westernized. It therefore becomes hard to verify whether it is China that is changing to a more modern society or it is these American companies that are changing China. Even as the economy becomes more capitalist, more Chinese citizens now prefer western products, and those in the working bracket make comparisons to those in their levels but living in the United States. China’s economy is driven by the people. This comes at a price for her large population as more citizens are now facing obesity diagnosis. This has caused worldwide concerns about the health of the Chinese citizens. This epidemic is largely blamed on the American fast food restaurants which serve very oily foods. Acceptance of the American fast food restaurants into China has come with many economic changes in the country. For instance, these companies have learnt how to give their customers, especially the Chinese natives what they want. These companies have also been able to make advertisements on the media and also introducing new dishes to their customers. McDonald’s had an earlier advertisement on Chinese national television about the advantages of taking beef. Some of these changes include the drastic change of the diet of the Chinese to that which is more westernized. For example, the intake of vegetables has gone down in the recent past and yet the intake of eggs and fries have gone up more than double (Smith, p 45). American companies in China generate a lot of revenue from their fast food companies. This makes Chinas economy to be very valuable to American economy. As a result, these two countries rely on each other for business matters, as well as trade relations. These fast food restaurants have largely contributed to the economic growth of China. This is possible through the investments that these companies have made in China, as well as providing employment to millions of citizens in China. The change made by the Chinese population to embrace the western restaurants is an improvement in itself. This is because the Chinese are known to be rigid in regards to their culture and way of life. This change has made both China and the United Stated to make an improved step towards the realization of the globalization dream. The restaurants have had to make numerous changes for the sake of maintaining the business and the clients. There is a lot of competition that exists between the American restaurants and also the competition that exists between the local restaurants and the American restaurants. This has caused all restaurants to be very innovative when it comes to customer satisfaction. These could be the reason why most of these restaurants after delivery services to their clients. Advertisement has also improved and in the business of the day, publicity really matters. In conclusion, the American fast food restaurants have received so many acceptances by the Chinese people such that they are now Chinese western food restaurants. Offering Chinese cuisines to their customers is the single most reason why they have been accepted in China. The advantages that these fast food restaurants have had on the Chinese economy are massive. The main disadvantage of these restaurants is that they are claimed to be the cause of the increased obese cases inn the country. However, this is an issue of concern through out the world, not just China. The competitions these restaurants bring are healthy as they ensure that the restaurants quality of food and their service remains top-notch. Chinese people have very deep roots in their culture and so they helped to shape what these American fast foods restaurants serve to their customers. This might explain why the Chinese are in control of their market as they consume only what they want. References: Hsu, R. China Fireworks: How to Make Dramatic Wealth from the Fastest-Growing Economy in the World. New York: John Wiley & Sons, 2008. Print Smith, A. F. Encyclopedia of Junk Food and Fast Food. Portsmouth: Greenwood Publishing Group, 2006. Print. Talwar, J. P. Fast Food, Fast Track: Immigrants, Big Business, and the American Dream. Cambridge Mass: West view Press, 2009. Print. Read More