It has long been held that Chinese people don't eat a lot of dairy products, and that includes cheese. But tastes are changing in China now and pizza is rapidly becoming a favorite food, cheese and all. Following in the footsteps of the Yum! Brands, Inc. popular KFC restaurants that were introduced in China in 1987, it has taken 20 years for pizza to gain wide acceptance in the Chinese marketplace. Today, pizza is a very popular food all over China and comes in a variety of products and service levels, from fast food and delivery to upscale casual sit-down dining.
Expanding from just one store in 1987, KFC now has over 3,000 locations in 650 different cities in China. After their success with the KFC brand, Yum! introduced Pizza Hut to China in 1990, and the Hut is now the number one pizza brand in that nation today, with nearly 500 Pizza Hut restaurants in 120 cities. Pizza Hut's wide range of product and service levels including dine-in restaurants, take-away outlets, and delivery units have been a good fit for the many different levels of Chinese society.
In fact, the Pizza Hut model has been such a good fit with Chinese consumers that the franchise has become a first-class dining experience. Evoking memories of the white linen tablecloths and tuxedo-clad customers eating at the fancy Taco Bell restaurant of the future in the sci-fi film "Demolition Man," diners in China consider Pizza Hut a trendy, upscale restaurant where even wealthy customers need reservations to get a table. The most-favored-restaurant status means that Chinese Pizza Hut stores are about twice as profitable as franchise locations in the United States. Today, Pizza Hut stores in China already generate about one-quarter of the entire Yum! Brand's profits.
Pizza Hut's success in China has not gone unnoticed and other Pizza.companies are now getting into the game as well. The Pizza.company is the second largest pizza chain in China with 244 outlets in China and other Asian and Middle Eastern Countries. Papa John's is gaining traction too. The brand entered China in 2003 and today has over 150 locations in more than 30 different Chinese cities. Even though Pizza Hut is clearly the Chinese pizza leader, Papa John's has made ground by offering free delivery services, and by 2008 the company made 20% of its total profits from sales in China alone. Other foreign players in the Chinese pizza party are Peppes Pizza, a Norwegian company with four locations and the Spanish company, Telepizza. The 98 Pizza.company from Taiwan is also making some headway in China.