Business Intelligence on Retailing, Franchising, and Consumerism in China

Yum To Invest CNY700 Million For Pizza Hut In China

Yum! Brands Inc. announced plans to invest over CNY700 million to open at least 150 new Pizza Hut restaurants in China this year.

Following the acquisition of Little Sheep, the Chinese hot pot restaurant chain, Yum continues its expansion in the Chinese market. According to Su Jingshi, president and chief executive officer for Yum China, Pizza Hut's early-stage development in China was difficult. It tried to open the Chinese market with the same brand positioning as it was in the U.S.; and it also tried other development models. The company finally settled on the operating model of casual dining in 1998. Su revealed that for the year of 2012, the company plans to invest over CNY700 million to open at least 150 new restaurants in China.

Statistics provided by the market research firm Euromonitor International showed that by 2010, the scale of the Chinese pizza restaurant market was about CNY8.3 billion, of which 46.8% was controlled by Yum. By the end of 2011, Yum had opened 4,493 restaurants in China, including 626 Pizza Hut restaurants.

In regards to the future development, Pizza Hut said it will focus more on the third- and fourth-tier cities. In addition, the company said it will not open franchised restaurants in the next three to five years.

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