As early as August 24th, the name of the investor was changed from McDonald's China Management Co., Ltd. to Golden Arch China Management Co., Ltd.
On June 9th this year, 65438, CITIC Holdings, CITIC Capital Holdings (hereinafter referred to as CITIC Capital), Carlyle Investment Group (hereinafter referred to as Carlyle) and McDonald's jointly announced that they had reached a strategic cooperation and established a new company, which will become the main franchisees of McDonald's in Chinese mainland and Hongkong in the next 20 years.
In the new company, CITIC and CITIC Capital hold 52% of the controlling shares, while Carlyle and McDonald's hold 28% and 20% of the shares respectively. This means that McDonald's has partially become a "state-owned enterprise" in Chinese mainland and Hongkong.
With the deep localization of McDonald's in China market, the rapid expansion of the number of stores has been put on the agenda. The new McDonald's China predicts that by the end of 2022, the number of restaurants in China will increase from 2,500 to 4,500, and the speed of opening new restaurants will gradually increase from about 250 in 2065 to about 500 in 2022.
If we want to complete the above number of stores, the new McDonald's may have to make adjustments. Io said. "Franchise" model is the key to McDonald's rapid expansion in the world for many years, but the situation in China is quite special. For a long time, the shops in Chinese mainland are mainly direct stores. Opening more stores quickly will be the key to the competition between McDonald's and KFC, and franchising may be the most effective way.
For the market choice of newly opened stores, some insiders said in an interview with the media that compared with first-tier cities, third-and fourth-tier cities have their own advantages in terms of population size, consumption structure and consumption willingness. With the increase of rent and labor costs, Chinese fast food has developed rapidly, and the market space in first-and second-tier cities is not large, and its attraction is not as good as before. McDonald's has experience in operating small and medium-sized cities in the United States and Canada, which helps the company to lay out the third and fourth lines.
According to Nielsen 20 17 report on China consumer confidence index in the second quarter, the consumer confidence index reached a record high in the second quarter of this year. Among them, the consumer confidence index of third-tier cities and rural areas increased by 3 points, namely 1 14 points and 1 12 points respectively, with the most obvious growth. It is understood that the Nielsen Consumer Confidence Index measures consumers' employment expectations, personal economic situation and willingness to consume. A consumer confidence index higher than 100 is positive, and vice versa.
Although McDonald's has been put on the agenda, it still needs to face the management challenges from other fast food brands and the extension of supply chain in the development of third-and fourth-tier cities.
According to McKinsey's data, consumers in these cities patronize western fast food chains as frequently as those in big cities and spend more than those in big cities. Some analysts said that the former cost more because they often have family dinners. He said that small and medium-sized cities have other advantages, such as "far lower" rent and labor costs in big cities, which means greater profits.
But there are also unexpected difficulties. For example, "It is easy to hire an employee who can manage 100 restaurants in Shanghai, but it is not easy to manage 100 restaurants in different cities." The analyst said that opening new restaurants in remote areas means hiring more managers and spending more money.
Cui Kai, a partner of Peking University Zongheng Management Consulting Group, said in an interview with Economic Daily-China Economic Net reporter that improving profitability is still a test for the "new McDonald's", and its announcement to launch third-and fourth-tier cities is more driven by the capital behind it.
Cui Kai believes that for catering enterprises, the costs of rent and labor in the third-and fourth-tier markets and county markets have been significantly reduced, but the sustainability of the consumer market still needs to be cultivated, and problems such as warehousing, logistics and distribution need to be solved in time. Although the joining mode can enable catering enterprises to expand rapidly in the above areas in a short time, there are still many challenges in the long-term management and control.
He said that the development of the catering industry is inseparable from the crowd gathering effect, and the scale of development is directly proportional to the level of economic development. Third-and fourth-tier cities have potential consumer markets, but it will take time to become an important part of the catering industry.