Western fast-food chains once ruled the casual dining scene in China. The opening of a Kentucky Fried Chicken (KFC) in a Chinese city was seen as a sign of development. Today, China has 10,000 KFCs, which is more than twice the number in America. Starbucks has 7,000 coffee shops, and McDonald’s has 6,000 burger outlets. The financial strength and reputation of these foreign brands made it difficult for local competitors to thrive.
However, this is changing. Starbucks saw its sales in China drop by 8% in the first quarter of the year, compared to the previous year. Yum China, which owns KFC in China, reported a 3% decline. While Chinese consumers are losing interest in foreign chains, they are increasingly favoring domestic ones.
Tastien, a local chain that offers hamburgers with Chinese flavors like Peking duck and mapo tofu, has opened 1,600 new shops in the past six months, reaching a total of 7,000 outlets. Another Chinese burger chain, Wallace, now has more than 20,000 locations. Cotti, a two-year-old coffee shop chain, aims to have 20,000 stores by the end of 2025, up from 6,000 last October. Luckin, an older coffee brand, opened 8,000 new shops in 2023, doubling its size. Mixue, which sells bubble tea, has 36,000 outlets.