Yum China recently released its 2021 annual report announcing that due to the severe impact of the new crown epidemic, its Chinese fast food brand Dongfang Jibai will cease operations.
In 2004, Yum China founded Dongfang Jibai, which was determined to build it into the largest Chinese fast food chain brand in China.
As of December 31, 2021, there are 5 Dongfang Jibai stores in China, all of which are planned to be permanently closed in 2022.
On March 11, a reporter from the Beijing News contacted Yum China in this regard, but the other party had not responded as of press time.
Industry experts believe that Yum China's strengths lie in operation and management, and the understanding and innovation of Chinese food is still weak.
At present, many local Chinese fast food companies are advancing by leaps and bounds, IPO news is frequent, and Internet celebrity brands are constantly emerging, and "product power" is more important.
In this big environment, Yum China wants to make Chinese food well. If there is no strong enough product, it is purely systemic or not feasible.
Zeng was determined to be "the most popular Chinese fast food"
On March 11, a reporter from the Beijing News searched for "Dongfang Jibai" on Dianping. All stores in Beijing showed "closed business". In Shanghai, most of the stores that were open were not rated by customers. 50, and some customer reviews even stayed in 2010.
In terms of location distribution, most of Dongfang Jibai's stores are located in exhibition halls and tourist areas. There are many customer comments that "go to Happy Valley, there is nothing to eat, so choose to try it" and "go to the exhibition and eat it".
At present, the official website of Dongfang Jibai shows "The official website is being upgraded, please wait."
Yum China stated in its 2021 annual report that Dongfang Jibai is a Chinese fast food brand, mainly located in transportation hubs.
The brand has been severely affected by the new crown epidemic. "Therefore, we have decided to terminate the operation of the brand. As of December 31, 2021, there are 5 Dongfang Jibai stores in China and all stores are planned to be permanently closed in 2022."
According to public information, Yum China established the Chinese catering brand Dongfang Jibai in 2004, and in May 2004, the Dongfang Jibai experimental store was unveiled in Shanghai.
At that time, Gu Haozhong, general manager of Dongfang Jibai brand, once said, "We want to become the most popular Chinese fast food brand".
Since then, Dongfang Jibai has continued to improve the menu. By 2008, there were meals in Sichuan, Shanghai and other places. At most, there were about 200 SKUs, covering breakfast, dinner, dessert, and even afternoon tea.
In 2008, Dongfang Jibai had 13 stores in Shanghai.
In March of the same year, Dongfang Jibai opened a store in Terminal 3 of Beijing Capital International Airport.
Dongfang Jibai said at the time that the opening of the Beijing store marked the beginning of national expansion.
In 2012, Dongfang Jibai had a total of 30 stores in the national market.
In 2020, Dongfang Jibai announced a strategic adjustment, transformed into a steamed bun, focusing on Huaiyang cuisine, and ultimately could not escape the defeat.
The main product is lacking and the price is high and is "spit"
"Dongfang Jibai" is taken from Su Dongpo's "Ode to the Red Cliff". Many consumers said that until now they did not know that "Dongfang Jibai" was actually a Chinese fast food brand.
Industry insiders believe that the too "literary" name of "Dongfang Jibai" is neither easy to remember nor contains any product information, which greatly reduces the recognition rate and spread rate, and has even become a brand name since its birth. "hard wound".
A reporter from the Beijing News saw on the public comment that Dongfang Jibai has a wide variety of products, including noodles, rice, soup, dim sum, and steamed buns, but it lacks the main products.
Many consumers feel that Dongfang Jibai is "everything is sold, but nothing tastes good": "the noodles are boiled noodles with soy sauce", "black pepper steak rice, not Chinese or Western".
Some consumers said that the door of Dongfang Jibai had the banner of "China's largest Chinese fast food" on the door, while the "KFC Brothers brand" was written on the store. "This in itself makes people feel very contradictory."
In addition, "high price" is also one of the concentrated "slots" of consumers for Dongfang Dawning.
On the public comment, there are not a few comments related to "expensive price" and "small portion".
Industry insiders believe that the fast food industry is not only a rigid demand, but also a highly competitive track. There are countless fast food restaurants, small restaurants, convenience stores, breakfast stalls, and food stalls. There are many more affordable and delicious choices than Dongfang Jiebai.
Selling the flour bread that Chinese people eat daily at a high price, even if the KFC brand is endorsed, it is difficult for customers to pay.
On March 11, Wen Zhihong, a partner and chain manager of Hejun Consulting, said in an interview with a reporter from the Beijing News that the high price of Dongfang Jibai has a great relationship with its location.
"There are very few stores in urban areas, and almost all of them are concentrated in transportation hubs such as airports, which is also the core problem that leads to high prices."
Wen Zhihong believes that for Yum Brands, having multiple brands is a good thing and a bad thing. "Dongfang Jishibai is a typical case of the lack of energy in the process of multi-brand development and the eventual death."
In Wen Zhihong's view, when Dongfang Jibai was founded, Chinese fast food did not have a strong brand. At that time, if Yum!m gave more attention to Dongfang Jibai, it would have opportunities and potential.
Dongfang Jibai has always lacked the main product and product positioning. "Later Dongfang Jibai transformed and wanted to position the main product as steamed buns. In fact, this kind of positioning is optimistic in the industry, but the problem is that they have not had time to strengthen this positioning. give up."
The performance of its Chinese food is not satisfactory
The Beijing News reporter noticed in the process of sorting out that Yum! Brands is known for its Western-style fast food brands, but it is obsessed with Chinese food.
Su Jingshi, President of Yum China, once proposed that China's catering market has a large space and needs to use a multi-brand strategy. "Chinese consumers have always demanded Chinese food, and it will be far greater than Western food."
Yum has successively acquired and newly established catering brands such as Little Sheep, Huang Jihuang, Lavazza, COFFii & JOY, Taco Bell and Dongfang Jibai.
On March 25, 2009, Yum China invested 493 million Hong Kong dollars in a 20% stake in Little Sheep. On May 3, 2011, Yum China announced the privatization of Little Sheep with a total amount of nearly 4.6 billion Hong Kong dollars.
In 2019, Yum China announced the acquisition of Huang Jihuang, a simmering pot brand, and then disclosed that the price of the acquisition was about US$185 million. After the transaction was completed, Yum China held a 93.3% stake in Huang Jihuang.
Little Sheep and Huang Jihuang's subsequent performances were not satisfactory.
According to Yum China's 2021 annual report, as of December 31, 2021, Little Sheep has more than 240 stores around the world, of which 220 are franchise stores, a decrease of more than 360 from the number of Little Sheep stores in its heyday.
The expansion of Huang Jihuang’s stores has almost stagnated. The latest data shows that it has 651 stores across the country, which has not changed significantly from before the acquisition, and the market response is relatively dull.
Is the KFC model "unreproducible"?
According to Yum China's 2021 annual report, the business revenue of other segments, including Little Sheep, Huang Jihuang, Dongfang Jibai, Lavazza and other brands, was US$473 million, and the restaurant operating profit margin was -20.8%.
In contrast, KFC and Pizza Hut will both achieve 20% revenue growth in 2021, accounting for 71.1% and 21.4% of their revenue respectively, with a combined contribution of 92.5%.
According to public data, in 2021, Yum China will open 1,806 new restaurants, a net increase of 1,282 restaurants, an average of 5 new stores per day, and a total of 11,788 stores.
Among them, KFC and Pizza Hut added 1,232 and 335 stores respectively.
In 2022, Yum China plans to add about 1,000 to 1,200 new stores on a net basis, with an average of 3-4 new stores per day, continuing to maintain the rhythm of "crazy store openings".
Industry voices pointed out that the closure of Dongfang shows that the success of the brand cannot be replicated.
Maybe in Yum China's view, it should not be difficult to build an oriental whiteness by relying on the complete development, operation, promotion, human resources and other systems of KFC and Pizza Hut, but it turns out that there is no strong enough product. , it can be said that "success in management, failure in management".
A reporter from the Beijing News noticed that Chinese fast food brands such as Hometown Chicken, Lao Niangjiu, Hefu Lao Noodles, and Yang Guofu have frequently reported IPOs recently. At the same time, Internet celebrity Chinese food brands such as "Ye Baozi" have emerged. These are the main attacks and deep cultivation of a category. Make your own "fist product".
Wen Zhihong believes that Laoxiangji, Lao Niangjiu and other companies have been focusing on building brands, with very strong products, and the store model has been constantly updated and iterated, trying to meet the needs of customers by combining market demand.
"For Yum China, its core competence and strengths lie in its systematic operational capabilities, but its understanding and innovation of Chinese food is relatively weak." Wen Zhihong said, how does Yum China invest in the two brands of Little Sheep and Huang Jihuang? , how to force innovation, and whether there are enough mechanisms to maintain its vitality, these will determine their future.
Beijing News reporter Wang Ping