Top Biz News
Burger King steps up pace with six more outlets in Beijing
By Andrew Moody (China Daily)
Updated: 2009-12-04 08:05
Fast food chain Burger King is planning to open six more restaurants in Beijing by June next year, as part of a major expansion in China.
The company, which has 25 outlets in the country, officially opened its first restaurant in downtown Beijing this week in Joy City in the Xidan area.
John Chidsey, chairman and chief executive of Burger King Holdings (BKC), who was in Beijing for the opening of what was the company's 12,000th restaurant worldwide, said the group was aiming for fast growth.
"We intend to be on a similar scale to our competitors. Certainly a heck of a lot bigger than we are today, " he said.
Burger King was a relative late entrant to China, not opening its first store until 2005.
KFC, owned by Yum!, which first came to China in 1987, has 2,000 outlets and McDonald's, having made its debut here in 1992, recently celebrated its 1,000th store opening.
There was speculation earlier this year that McDonald's had slowed down its expansion in China as a result of the economic downturn.
Chidsey said because Burger King was starting from a low base it had major scope for expansion regardless of economic conditions.
"When you are ahead in the market, any downturn in sales is going to hurt you very bad. If we were offered 10 suitable sites we would take them," he said.
BKC's global store development program has accelerated since the company, founded in 1954, was bought by a private equity concern in 2003 and then floated on the New York Stock Exchange in 2006.
Seventeen of the company's current 25 China stores are company-owned so as to establish a Burger King business model for China but it intends to grow in future by finding franchise partners.
Its franchise partner in Beijing is Shenzhen-listed Beijing Mainstreets Investment Group Corporation (BMIG), whose major activity is land development.
Brian Li, chairman of BMIG, said his company was actively looking for upscale mall sites like the 200 sq m Joy City mall location, which can seat 110.
"We believe that high quality locations like this encourage people who come here to spread the word about the brand, " he said.
"It is also difficult for our competitors to move into new developments like this since they have a number of stores in the area already and would just be cannibalizing their own customers."
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"It might have been seen as a luxury 15 or 20 years ago but it is now the office club, where people from the office have their lunch," he said.
Peter Tan, president of BKC Asia-Pacific, who previously held a similar position with McDonald's, said the target market was people from their late-teens to 30.
"This group wants choice, freedom and the sense of being in control. The good thing about targeting this group is that younger people aspire to be in this age group as do older people who want to be young again," he said.
Burger King has slightly tweaked its product range to Chinese tastes by introducing the Mala Whopper, a spicier version of its famous hamburger.
