Why McDonald’s Is Thriving In China

McDonald's was the first American fast food ever opened in my city about 20 years ago. I remember celebrating my birthday over there when I was a kid, and that was considered a privilege back then.

I think the video failed to stress how important catering to the tastes of Chinese consumers was for McDonalds’ success there. Chinese consumers aren’t as much interested in burgers, fries, and all the greasy stuff as they are into rice bowls, wraps, congee, youtiao (油条), tea beverages. I think these local offering greatly boosted its popularity amongst locals.

It's amazing how popular McDonalds is in other countries, it always shocks me whenever I travel abroad

25 years ago when I was a kid, McDonald’s was THE place to be. It’s the place to have a treat at a western restaurant. It’s bright, clean, and has pictures of happy people plastered on the wall. Most McDonald restaurants also had a kids play area , which was better than outside playgrounds at the time. HappyMeal toys were a different level. I still remember some of my earliest toys; they were such good quality plastic. Fast forward a few years, I was waiting for my mom while she worked, because I couldn’t be in her office. I sat at McDonald’s. It’s a safe place to be with AC and clean washrooms. For me, The good memories of McDonald’s was tied to the experience and the place.

I remember going to McDonalds in Mumbai (India) in the early 2000s and being excited about the cultural freebies (coloured garba sticks) they offered to attract new customers. Years later I am here in France and watching McDo (as we call it here) giving every other fast-food chain tough competition to become the most sought after fast-food restaurant.

McDonald's, one of the world's largest restaurant chains, with 60 million customers daily, over 40,000 locations in 100 countries, and 1.9 million employees, has announced plans to open 900 new restaurants in 2023, with a focus on expanding in China. China is seen as a massive growth opportunity for McDonald's, as the company aims to double its current store count of 4,500 within the next decade or two. However, McDonald's has faced challenges in the Chinese market, including cultural differences in food preferences, food safety issues, competition from local rivals, and rising real estate costs.
McDonald's first entered the Chinese market in 1990, opening its first restaurant in Shenzhen, and expanded rapidly, opening its 20th restaurant in Beijing in 1994. In 2010, McDonald's announced plans to double its footprint in China to 2,000 restaurants. Despite these efforts, McDonald's was still playing catch up with rival KFC, which had over 8,100 restaurants in China compared to McDonald's 4,642 stores at that time. One reason for KFC's larger presence in China was its first mover advantage, as it owned the distribution business in China, allowing it to access smaller cities before McDonald's. Additionally, chicken, which is a larger protein in China, was more appealing to Chinese consumers than beef, which is the main focus of McDonald's menu.
In 2014, McDonald's faced a food quality scandal in China, along with KFC parent Yum! Brands, after reporters secretly filmed workers picking up meat off the floor of a local supplier. This led to a decline in sales for McDonald's China business that year. McDonald's also faced competition from local rivals, including noodle stands that sold hot bowls of noodles at a fraction of the cost of a McDonald's meal. Despite these challenges, the fast food industry in China was worth $184 billion, indicating the immense potential for growth.
In 2017, McDonald's made a strategic move to sell its China business for over $2 billion to Chinese state-owned enterprise CITIC and US private equity firm Carlyle Group. Under the agreement, McDonald's retained a 20% stake in the business, while CITIC owned 52% and Carlyle Group held a 28% stake. This move allowed McDonald's to embrace its franchise model and reduce operating costs, as its partners in China would be responsible for providing capital, including real estate, and McDonald's would receive royalties and fees for new restaurant openings based on sales. The partnership with a state-owned entity also provided benefits in terms of site allocation, as real estate costs and site acquisition costs in China are considerably higher than in the United States.
Despite the challenges and changes in ownership structure, McDonald's remains committed to the long-term growth opportunity in China. The company plans to open 900 new restaurants in 2023, with nearly half of them being in China. McDonald's sees China as a priority market for store development, with the aim to double its store count in the country within the next decade or two. The partnership with CITIC and Carlyle Group provides McDonald's with the necessary capital and resources to expand in China, while also navigating the regulatory and cultural differences that come with operating in the Chinese market.
In conclusion, McDonald's is one of the world's largest restaurant chains with a massive global footprint, and it is planning to expand further by opening 900 new restaurants in 2023, with a focus on China. Despite facing challenges in the Chinese market, including cultural differences, food safety issues, and competition from local rivals, McDonald's remains committed to the long-term growth potential in China.
世界最大のレストランチェーンの1つであるマクドナルドは、毎日6,000万人の顧客、100か国の40,000を超える場所、190万人の従業員を擁し、中国での拡大に焦点を当てて、2023年に900の新しいレストランをオープンする計画を発表しました。 中国は、マクドナルドにとって大きな成長の機会と見なされており、同社は今後10年か20年以内に現在の4,500店舗の店舗数を倍増させることを目指しています。 しかし、マクドナルドは、食の嗜好における文化の違い、食品の安全性の問題、地元のライバルとの競争、不動産コストの上昇など、中国市場で課題に直面しています。
マクドナルドは1990年に中国市場に初めて参入し、深センに最初のレストランをオープンし、1994年に北京に20番目のレストランをオープンして急速に拡大しました。 これらの努力にもかかわらず、マクドナルドは、当時のマクドナルドの4,642店舗と比較して、中国に8,100を超えるレストランを持っていたライバルのKFCにまだ追いついていました。 KFCが中国でより大きな存在感を示した理由の1つは、中国での流通事業を所有していたため、マクドナルドよりも小さな都市へのアクセスを可能にしたため、先行者の優位性でした。 さらに、中国の消費者にとっては、マクドナルドのメニューの主力である牛肉よりも、タンパク質の多い鶏肉の方が魅力的でした。
2014年、マクドナルドはKFCの親会社であるYum!とともに、中国で食品品質のスキャンダルに直面しました。 ブランド、地元のサプライヤーの床から肉を拾う労働者を記者が密かに撮影した後. これにより、その年のマクドナルドの中国事業の売上は減少しました。 マクドナルドは、中国のファーストフード業界において、地元のライバルとの競争や食品の安全性の問題など、様々な課題に直面しています。しかし、これらの課題にもかかわらず、中国のファーストフード業界は1,840億ドルの価値があり、成長の大きな可能性を示しています。
2017年、マクドナルドは中国の国有企業であるCITICと米国のプライベートエクイティ会社であるカーライルグループに20億ドル以上で中国事業を売却するという戦略的な動きをしました。この契約に基づき、マクドナルドは事業の20%の株式を保有し、CITICは52%を所有し、カーライルグループは28%の株式を保有していました。この動きにより、マクドナルドはフランチャイズモデルを採用し、運営コストを削減することができました。これは、中国のパートナーが不動産を含む資本を提供する責任を負い、マクドナルドが販売に基づいて新しいレストランを開くためのロイヤルティと手数料を受け取ることになるからです。中国の不動産コストと用地取得コストは米国に比べてかなり高いため、国営企業とのパートナーシップは用地の割り当ての面でもメリットをもたらしました。
所有構造の課題と変化にもかかわらず、マクドナルドは中国での長期的な成長機会に引き続き取り組んでいます。同社は2023年に900の新しいレストランをオープンする予定で、その半分近くが中国にあります。マクドナルドは、中国を店舗開発の優先市場と見なしており、今後10年または20年以内に国内の店舗数を2倍にすることを目指しています。CITICおよびCarlyle Groupとの提携により、マクドナルドは中国での事業拡大に必要な資本とリソースを手に入れると同時に、中国市場での事業に伴う規制や文化の違いをうまく乗り切ることができます。
結論として、マクドナルドは世界最大のレストランチェーンの一つであり、大規模なグローバルなフットプリントを持ち、中国を中心に2023年に900店舗の新しいレストランをオープンすることでさらに拡大する計画をしています。中国市場での課題として文化の違い、食品の安全性の問題、地元の競合他社との競争などがありますが、それにもかかわらず、マクドナルドは中国での長期的な成長の可能性に引き続き取り組んでいます。 それを目指しています。

One thing you forgot to mention: Eating at McDonald’s is now actually cheaper than eating at a noodle shop or a meal box store in most tier 1 and 2 cities.
At ¥13.9/$2, you can get a medium drink and a double cheeseburger/6 McNuggets/some other local offerings. Not even KFC can come up with similar deals these years.

Honestly I miss Chinese McDonalds now that I'm in the UK, there is just in general more options for food in Chinese ones, and they put effort in product development, as I remember they come up with seasonal offerings almost every year, like sakura ice cream or matcha ice cream, maybe because the local competition is much fiercer than UK.

That's one thing I learned about McD 's when I got older is that they're more of a real estate investor than a restaurant.

McDonald's is successful in many countries because of its price, simplicity, fast serving methods and branding

I noticed Andrew Charles stressed the word "massive" when referring to McDonald's expensansion. Massive is an apt word to describe their impact on a population, as well.

I have seen many McDonald's stores being opened here in Brazil in the last couple of years. They have been through a major expansion since the pandemic.

I haven't had a McD in the States for 20 years, but when I was in China last year, I kept going there. I don't like the food, but will buy for the toys. Mainly because of the Sanrio, Pokemon, and other anime toys that comes with the meals🥰 I love my singing/dancing Psyduck!

It is rather cheap, delicious and convenient compared to most Chinese restaurants. For example, a simple noodles with beef would cost me about 25 cny in the city while the double cheeseburger with pie or drink only cost 14 cny. Also, McDonald’s price are stable even in city downtown area very popular amount students and office workers

I was in Hangzhou before moving to Ireland. It is very impressive that McDonald's have a lots of chinese style food and cheaper than a lot of chinese food.

Most American fastfoods are huge in Asia from McDonalds, KFC, and Burger King. What made them more appealing are the unique menu catered for the local palate. In the Philippines, I don't to McDonalds because of the burger, but because of their fried chicken.

McDonald's sold its China business a few years ago and the brand name was changed. The only things not changed were the "M" and the food menu. But to Chinese, McDonald is already a history.

McD always has a line in Japan, the Japanese love McD! But my Japanese hubby will often prefer to go to Mos Burger in Japan, feeling its healthier. Occasionally he wants his McD but he doesn't eat there too often.

As an Asian-American who have visited China multiple times as result of my marriage to an international student, I must stress it's important to visit KFC at the airport when you land. it's absolutely one of the best fried chicken drumsticks you will ever have if not the BEST. LOL!
Back to the topic; there is a lot of competitions due to smaller chains or individual shops that sell at living wage. There is a huge portion of the population who can't afford these American Chains on daily basis because their menus are priced like USD. I'm just guessing here, the best i can recall is avg income in China is about 1/4-1/5 of the US yet Starbucks Grande drinks go for 40-50 RMB, equates to $6-$8 USD. oh lord, the fast food here is like premium dining in China, truly only spoiled kids and people living paycheck to paycheck go for these places.

To be fair, basically all McDonald's locations in Germany and most of (at least Western) Europe have the big order Kiosks and ordering mobile through their app..

McDonald's has a bigger and localized menu here in China. Their spicy wings are the best. And KFC even serves Asian style congee in the morning and rice bowls in their whole-day menu.

McDonalds is not the cheap fast food in China like it is in the States. It cannot compete on price with local chains. Instead they are more middle-end and found great success there

I rarely go to McD when I am in America,but I love the McD’s locally food in China.

How McDonald's is able to supply all these restaurants worldwide is truly amazing...

KFC for breakfast is a thing for locals in China. That being said they do have Asian items but KFC being the go to says a lot

the electronic kiosk is used to collect data and also used to save labour costs. many stores will only have 2-3 staff. biggest rival is actually KFC, and is beating MacDonald's in terms of revenue. Service is very important.. and i think is Macdonalds weakness in China.

I remember eating at McDonald’s in Hong Kong in the 80’s. I was in the U.S. navy and the sight of the Golden Arches was a welcome thing after being at sea for months. I had it in my mind I was going to throw down when I got there. I remember all the Chinese business men in front of me in line. They all ordered just a hamburger, small fry and small coke. When I went to order I ordered 2 Big Macs , a cheeseburger, large fry, apple pie and a large coke. All the Asian people in line behind me were all snickering and whispering to each other 😂. They were probably like “check out the American barbarian!” 😂

Fun fact (Maybe not): The ice cream/milkshake machine also broke A LOT whenever I returned to Shanghai.

Mac Donald's is a UNIVERSAL FOOD 🍟🍔🥤it transcends cultural, National, Racial and demographic boundaries. It's easy on taste buds even for the most sensitive of the client's.

8 years in China and I never felt the desire to eat Mcdonalds. The local noodles really are excellent and affordable.

I miss china even though i had a lot of difficulties when covid happened, i don't go to MC donald's in US but when i was in china i found myself there a lot!

But McDonald's menu has not changed much ever since it opened. Meanwhile, KFC has successfully created great localized food multiple times. Sure, you can open up more shops but it is really not cool anymore to go to a McDonald's. BTW, kiosks and delivery service are really NOT a competitive advantage. Those things are so common in China now.

I am a Chinese, I remember when I was young, it was a fashion and great joy to have your birthday parties in Mcdonalds in China, I was even a character in a commercial for Mcdonalds when I was 5.

You can’t discuss McDonald in China, or any where in Asia, without mentioning that they really take pride in what they do. The restaurants are clean, the food is properly cooked and well assembled. It’s totally different. It’s actually good.

I visit McDonald sometimes simply because I like hamburgers and fries. The restaurants in China normally don't provide hamburgers and fries. and I have to go to McDonald/KFC/ burgers king to get my fries.

One of my go to when I went to McD in China was grill chicken sandwich. And I supposed that is China only McD menu cause I don’t see any in Japan, Singapore or Indonesia. Oh, also pork pitan porridge with youtiao😂 in a breakfast menu (also China only I think)

My young son was acting up at McDonald's. I told him he needed to behave when we were in a restaurant. He said this isn't a restaurant it's McDonald's.

I think the real growth driver is in the sale of the business in China to state owned entities, there were probably some clause in the SPA that required a certain amount of new builds per year or over a period of time. It's also a massive advantage to hand the keys to the business to the main driving force behind everything in China, which is the gov (via their investment arms). KFC is still the consensus #1 fast food option for the Chinese consumers, but new store opening is nothing to scoff at especially at the rate of hundreds per year.

I stopped eating not only at McDonald’s but all fast food restaurants. The food is not great the amount of food you get is questionable for the amount of money your spending. I can go to a proper sit down restaurant and have a better meal for the same amount of money. It just doesn’t make sense spending that kind of money on fast food, fast food use to be attractively priced.

Your business will make you rich but investment makes and you keep you wealthy, we all deserve to be successful and have financial freedom, I pray everyone here becomes successful

I could be mistake... i think a big mac is smaller in Canada than China.. maybe due to the high carbon tax and sales tax on food. by saying that, when i was in the Mcdonalds in that Shenzhen store for the 1st time as a kid.. it cost my parents days of salary... Mcdonalds back in early 90s was a luxury.. so they had to be good ....same as when I was in a Sams Club in China back in the 90s.. Warehouse shopping is such an unique experience.. sadly there aint no Sams Club in Canada like China.

McDonald’s was the place to go in the 1970s and 80s. Then they switched to vegetable oil and the fries lost taste. They reduced ingredient quality like pretty much every restaurant has and they pulled the playgrounds families enjoyed. If all they care about are adult customers there are just too many other choices like Chipotle now.
I’ve not been to a Mickey Ds for years, even on the road most of us will get a deli sandwich before heart stopping McDonald’s. But I see their mile long drive through lines so they do have plenty of customers, not sure who they are or why they wait so long for sketch food.

McDonalds is really something special,no matter what the cynics say.

I don’t know what happened, but in the last few years McDonald’s quality has gone downhill.
Also, their menu doesn’t have as many items as they used to.
Quit blaming the pandemic for trimming back the menu. Bring back some favorites like the chicken strips; they are so good and people want chicken products.

Fun fact: When people order through a kiosk machine, they order more food. The automated system removes the embarrassment of appearing to be a pig to a human order taker.

One of the weird joys of traveling to Asia was getting to see a McDonald's wherever I went. It created a bizarre sense of comfort.

Are multiple cashiers and lineups for orders still a thing in the USA? Cuz here in Toronto, every single McDonald's I've been to in the last couple of years is kiosk-based for orders (like in China).

I would like a story of the country that mcdonalds failed in south america

I am not a big McDonald's fan but sometimes when I lived in China I would pop in to one of their stores for convenience (and clean toilets). Anyway, I notice I was always the oldest person in the restaurant. At the time I was in my late fourties.
McDonald's in China is a phenomenon amongst some young Chinese who want to experience something a little more "exotic" than their own amazing and diverse cuisine

I do have to point out that compared to McDonald's, KFC is way more popular, especially in more rural regions.

when I don't know what to eat during work day, I always eat McDonald as they have some good set meals

If China doubles McD's, then McDs will be "you know, that China/American restaurant"... weird. (If it's like half China, half American.)

Well, in China, McDonald's and KFC restaurant that I've visited food safety grades are usually A or B, which are considered excellent and good. However, almost 98% of the restaurants I have visited are graded C, which is not so great. This could also explain why...

McDonald's has become a real estate company.

McPhilippines has adopted the Filipino taste of spaghetti recently. Now every fast food spaghetti in Philippines is now sweet. I wish they kept their original sour spagetti. So sad.

Does this mean that when there's a stable logistics mechanics on the Artemis moon base, KFC, McDonald's or Pizza Hut are going to open up there?

Starbucks is also huge in China aswell, I’m pretty sure they open a new Starbucks every 16 hours in China

would love to see a no mc donalds month.

That's a good thing actually. Dependence is leverage.

“Large pool of labor”… camera switches to an actual pool 😂😂😂💀

I wonder if there's any localized type of food. When I was in Japan Mcdonalds I had a shrimp patty burger.

In fact, McDonald's is more common only in the eastern coast, while KFC is really rooted in China's "down market", although McDonald's meals are cheaper than KFC.

If you wanna be successful, you most take responsibility for your emotions, not place the blame on others. In addition to make you feel more guilty about your faults, pointing the finger at others will only serve to increase your sense of personal accountability. There's always a risk in every investment, yet people still invest and succeed. You must look outward if you wanna be successful in life.

Never underestimate this giant in supply and tech

If you come to McDonald’s China, you gotta try nuggets, ppl who returns from the US says it’s way way better compared McDonald’s in the US

McDonald’s it’s not in the restaurant game it’s in the real estate game
🙈

McDonalds be like: There's 1.4 billion chinese for us to make fat and unhealthy

Visual stunning business micro-documentaries ……. Very educational to watch 🍿

China really is just another place, it's cities are as cosmopolitan as any other. cajun crawfish boils are very popular. the agriculture ministry is spending billions on advertising potatoes

well most those employees arent actually mcdonalds employees

Mc Donald's is popular in China for three reasons. Firstly, it is a convenient food for children. Secondly, Chinese society has become so work orientated and stressed out that fast food is the answer to having no time to cook (or live). Thirdly, the younger generation of Chinese never learned to cook properly which is ironic considering how awesome Chinese cuisine is.

It's almost like having good employees can make for a pleasant experience for fast food consumers. Around here, they are all ex cons; often with little to no work ethic.

The food health scene in China among young professionals and students is non existent in China in contrast in with the US or Canada.

McDonalds pulling out of Russia made barely a blip but pulling out of China will be something totally different.

The other question is, Why is Mcdonalds sucking everywhere else and struggling to maintain the quality of their food even from 2 years ago.

You actually don't use a console to place orders. You scan a QR code and then see the menu on your phone, and you place the order and pay right there.

Domino's opened its first restaurant in my city in southwestern China last week, and the average queue is 30-40min just to get into the restaurant to order. They serve decent pizza, but it's only Domino's ....

the chinese McDonald has larger menu and their burgers/food also taste better 😍

McDonalds in China tastes 100x better than in Australia (KFC too) so it’s hardly surprising

I ate at a McDonalds in Beijing. The food was actually GOOD. It tasted like McDonald’s USED to taste in America many years ago.

I wish McDonald's would restore more healthy items to their menu such as salads and grilled chicken. I'm pivoting away from McDonald's and more toward Panera Bread ever since they added their Sip Club beverage subscription.

I haven't eaten MD for 8yrs, after I found that there is 17 ingredients in the fries 🍟 They can have it!

Watching this... as I eat McDonald's.

The chicken sandwiches of the Chinese McDonald’s are so good, not available in the US lol

In China, McDonald's is far less numerous than KFC, which is open in almost every small city in China, even in very remote and poor areas. McDonald's, on the other hand, is only willing to open stores in economically developed areas, and I don't know if this is in consideration of operating costs or consumer base. And KFC's localized menu is much better than McDonald's, KFC has Chinese style rice and chicken burger. But when I arrived in the US, I still found that McDonald's in China is 100 times better than in the US.

When the McD app had the free large with $1 purchase
Could get a McChicken and drink for $3.50
And you’d have a meal for less than $4

America took McDonald’s for granted.

McDonalds’ food in China are not cheap just like Starbucks. As a tourist there, I felt a little dent to the wallet.

The affordability is wat they need to focus on and it’s a wrap in china 🇨🇳

it offers a different option, just like you guys have Chinese takeaways in the U.S.

The only restaurant in China where Chinese are confident about food safety 😊

back in the 90s , Mc and KFC are considered fancy place in China , parents take children there as a prize for their good behavior .

Didn't know McDonald's and Starbucks were doing so well in China.

AS A CHINESE, I CAN TELL YOU THAT WE LIKE KFC SO MUCH IN CHINA. IT WILL BE HARD FOR mc TO TAKE OVER

For us, McDonald's is equivalent to snacks, not staple food

Here in Austria we had those ordering displays since 2018 haha

因为比肯德基便宜还比中国本土的汉堡店好吃，主要是门店比汉堡王多，不然我一定选择汉堡王😂

They need a Chinese McDonald's in Arizona need their different food they serve

McDonal in China is run by the local franchise owned by the State enterprise. It has little to do with McDonald in the U.S, even the supply chain is different.

I have ate MD for 8yrs, after I found that there is 17 ingredients in the fries 🍟 They can have it!