Things have dramatically changed for KFC within one year in China, once, not so long ago, the KFC brand was considered a success story, this was in 2011, the brand was at its peak on the Chinese market since the first opening of a KFC outlet in China in 1987.
The troubles KFC is having in China is a big issue for the brand, since China is its mos profitable market, with 42% of the global profits made in China last year, but this is becoming a problem since the sales in China have dropped 4 quarters in a row.
The constant bad result all over the year is the result of a series of crisis. Yum! Brands that manages KFC in China were expecting better results in the autumn, believing that the crisis is over, but that was not the case, in spite of constant openings of KFC restaurants in China (there is over 4.400 restaurants at the moment).
Everything bean in december 2012, with a report from the Chinese television saying that chicken have been found with excessive levels of antibiotics and forbidden products among KFC’s suppliers.
The oher alert was the bird flu that spead in China a few months ago, undermining the Chinese consumer confidence in everything poultry. To woren the case, in july it was found that there were hygiene issues with the water used in KFC, something that was dramatic in a context of threatening Chinese media editorials.
Still; KFC’s trouble might have deeper roots than food safety scandals. When they landed in China, these resaurants had an appeal of novelty but now Chinese consumers are looking for a more varied diet and KFC might have made the mistake to adapt its meals to the Chinese taste, with new dishes that cannot be found in any KFC outside of China. Hat might have made of KFC a more familial restaurant but it fragilizes its western appeal at the same time, ofering nothing more distinctive from Chinese fast food chains that are doing very well on their side, offering many new options. A,d these chains can be much more efficient in tailoring the meals to Chinese taste, as the standards in Cina are constantly increasing.
The problem might be important for KFC, since in the midst of the bird flu the company was much more impacted than any of its competitors selling poultry. This might be the sign hat KFC has to rethink its brand model in China and cannot limit itself to PR communication to mitigate a crisis.
