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Fast-food chains add Chinese flavor

KFC launched a new breakfast snack called shaobing last month. Dotted with sesame seeds, the traditional toasted cake has origins tracing back to the Western Han Dynasty (206 BC-24 AD) and is a sign that international fast-food chains are tailoring their menus to local tastes in the pursuit of expanded business in China.

Most foreign fast-food chains originally entered China with the same menus that made them a success back home.

While many Chinese embraced the exotic taste of hamburgers, pizzas and fried chicken, the Western menus were somewhat limited. KFC is not alone in embracing a shift in strategy.

Starbucks introduced moon cakes and zongzi, a pyramid-shaped dumpling made of glutinous rice wrapped in bamboo or reed leaves. Ice cream giant Haagen-Dazs is offering moon cakes stuffed with ice cream.

"Within the vast Chinese catering market, Chinese foods still take the lion's share," said Kuang Jie, a senior partner of Beijing-based Puhui Chuangzhan Management Consulting Co.

"International restaurant chains aim to ride the fast-growing consuming market because of sluggish demand in their home markets," he said.

Retail sales in the catering industry in the first quarter rose 19 percent from a year earlier to 438.3 billion yuan (US$64.46 billion).

That comes after a 25 percent surge in 2008, the 18th consecutive year of double-digit growth.

The market is expected to reach 2 trillion yuan in 2010, and a larger number of consumers would prefer Chinese-style cuisine rather than Western food, said Yang Liu, a vice chairman of China Cuisine Association.

Shaobing is the latest attempt by KFC to add Chinese courses to its menus. The United States-based chain best known for its fried chicken has launched several Chinese snacks, including spring rolls, Chinese-style porridge and youtiao, or strips of fried dough.

Safer, healthier

"I would like to have a try of (KFC's) shaobing," said Vivian Chen, a corporate accountant. "I have long missed shaobing stalls along the streets."

"But the food offered by food chains is much safer and healthier than those sold by street vendors. I often buy youtiao at KFC on my way to work," she said.

Many Chinese rue the loss of vendors who used to ply the streets of Shanghai with these popular snacks. But hygiene regulations and the city's desire to maintain a certain image have driven them off.

KFC has combined both Chinese and Western touches, offering shaobing in two flavors, stuffed with smoked chicken or bacon and fried eggs.

"There is a bright future for Western food chains that put Chinese-style cuisine on their menus," said Kuang.

"A combination of Western processing techniques and Chinese food and flavors could be a hit," he added.

Apart from expanding their food portfolios, global food chain retailers are also trying to ingratiate themselves by adopting Chinese-inspired store design and decor.

Starbucks incorporated Chinese elements in several of its outlets across the nation to harmonize with surrounding buildings.

A Starbucks coffee house built in an old house in Chengdu uses tables and chairs made from bamboo. Even the floor is made of bamboo. The coffee house didn't want to change the appearance of the old house and maintains harmony with the local environment.

The Starbucks in the famed Yu Gardens in Shanghai has also kept a nostalgic touch.

"Starbucks tried to incorporate many Chinese elements in both food and store design to make the shops more amiable and home-like," said Caren Li, public relations manager for Starbucks (China). "It is our hope to win the hearts of more Chinese consumers with these creative foods and stores."

Overseas restaurant chains haven't stopped there in their ambition to expand in China.

Yum! Brands Inc, the world's largest restaurant company and the parent of KFC, Pizza Hut and Taco Bell, established Chinese quick-service restaurants known as East Dawning in China in 2004.

Local players

East Dawning outlets provide affordable Chinese food in a wide range of options. There were 18 East Dawning shops in China by the end of March.

"It is natural for global catering groups to eye the Chinese market because of its faster growth," said Kuang. "At the same time, there are no local players strong enough to pose a serious threat yet because domestic outlets don't have the same level of management and brand-building prowess."

He added: "Hundreds of thousands of dumpling restaurants in China just look the same and don't attempt to differentiate themselves from others."

Concern is growing in the domestic fast-food industry that local restaurants will be further squeezed by competition from global players, but others argue overseas chains help create a new market that benefits both parties.

"Overseas chains can't replace our own kitchen experts," said Dickson Xiao, a 24-year-old office worker who grew up with Western food but still favors Chinese cuisine.

"Fast-food chains can't really replicate authentic Chinese cooking," Xiao added. "Besides, prices in overseas restaurants are usually unreasonably high and the food is relatively unhealthy."


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