Fabulous Adventures in Localization of Foreign Businesses in China
One billion Chinese people could become your clients. The Chinese economy has grown by 10% over the last 33 years. It’s simple to see why China is a popular destination for startups and global businesses looking to expand their revenue with solid localization strategies.
Wuhan City has gone famous on Chinese social media once more, but this time for something more familiar – its food. KFC added Wuhan’s famous “Reganmian” (hot and dry noodles) to its morning menu, attracting hungry customers from all around the city to try this unique menu item.
This is the first time KFC, an American-style fast-food restaurant, has offered Chinese noodles with chopsticks to its clients. Many of them responded positively to KFC’s latest attempt at localization.
Many people commented it tasted like the actual “Reganmian” offered at street booths all around the city. Outside of Wuhan, many social media users are clamoring for this new innovative meal. They also asked when it would be available across the whole nation.
This is an example of a successful localization strategy of a U.S business in China. In today’s post, we will show you detailed foreign brands’ adventures in localization for the China market.
A pivot in the approach of localization.
Let’s talk about KFC’s localization strategy.
KFC’s menu includes more traditional Chinese dishes than just “Reganmian.” Since becoming a signature dish in 2008, KFC has introduced “Youtiao,” or fried dough sticks, the first Chinese street snack option to grace its menu.
After getting the benefits of an earlier triumph in its localization plan, KFC went on to add several Chinese specialties, including rice congee, tea leaf eggs, tofu, and Sichuan-style beef wraps. Many of these have become top-selling foods at this huge US brand.
KFC changed its menu last year as a hot trend chaser, offering customers “Luosifen,” or river snail rice noodles, as well as bubble tea, two of the most popular meals among a younger generation of Chinese customers.
To maximize the Chinese market’s potential and boost its competitiveness, KFC started on a food localization journey in 2004, developing a marketing plan to integrate itself into the country’s local catering culture.
Localization is a type of marketing that focuses on attracting motivated purchasers in a specific area. KFC was adapting its products, content, and services to match the needs of its target market’s clients, ensuring that its products maintained its attractiveness and fast gained market share.
The localization strategy of KFC has gained numerous successes. KFC has distanced itself from other Western-style corporations such as McDonald’s and Burger King by introducing specialized items, making it China’s most famous food brand, with 7,166 restaurants open by the end of 2020.
Even though the COVID-19 crisis severely damaged the restaurant business, KFC reported better-than-expected revenues. According to Yum China Holdings, its revenues reached $5.8 billion in 2020, accounting for 70.47 percent of the total revenues accrued by the company.
Localization is a must for any global business.
Localization has been one of the keys for multinational firms looking to expand their market share in China in recent years.
McDonald’s competes with KFC and continues to throw down the localization challenge to KFC. McDonald’s changed its Chinese name to “Jingongmen,” which translates to “Golden Arches,” to flatter Chinese customers.
It recently rolled out a head-scratching dish called “Roujiamo” (Chinese-style meat burger), a classic food item in northwest China’s Shaanxi Province, attracting many discussions online.
Luxury labels such as LV, Givenchy, Celine, Gucci, and Dior have also been keen on making limited product offerings incorporating local themes for traditional Chinese occasions like Chinese Valentine’s Day.
Multinational corporations have resorted to marketing campaigns for traditional local festivals to please their Chinese clients better.
For example, multinational firms like Apple and Adidas have become familiar with releasing a one-of-a-kind Chinese New Year advertising campaign to celebrate the yearly celebration.
Localization strategies may generate a lot of discussion on the internet, which helps global businesses get more visibility among Chinese buyers.
To succeed in China and other Asian countries, you must deeply understand their uniqueness, languages, cultures, dialects, etc. For detailed localization tips, you may download our free white paper here.
The Chinese market for Western brands is booming.
China’s large market and promising economic growth make it a powerful magnet for global investment.
As the world’s largest consumer market, China has been called the “go-to” market, with total retail sales of consumer goods exceeding $6.05 trillion last year and final consumption accounting for 54.3 percent of GDP.
Because of the enormous demand, foreign corporations are investing millions into China in the hopes of gaining a piece of the lucrative market.
Despite the pandemic’s continuous changes, global corporations’ investment in China has continued to rise. Tesla Inc. is expanding its production capacity at its Chinese factory.
The Walt Disney Company is working on a new theme area development for Shanghai Disneyland. Other international brands, such as Walmart, Starbucks, and Adidas, have expanded their operations and investments in China.
According to the United Nations Conference on Trade and Development, China has surpassed the United States as the biggest destination for foreign investment, attracting 163 billion dollars in new investments from foreign companies in 2020.
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