Retailing, Franchising, and Consumerism Business Intelligence in China

Yum Aims For Restaurant Expansion Inside Chinese Electronics Stores

The international restaurant chain operator Yum! Brands and the Chinese electronics and home appliances retailer Suning Appliance Company Limited have jointly announced in Nanjing that the two parties have formed a strategic alliance to cooperate in opening new outlets and business center planning.

According to the strategic alliance agreement, Yum will open 150 restaurants in Suning's electronics stores over the next five years. These restaurants will include brands such as KFC, Pizza Hut, East Dawning, and Little Sheep.

Prior to this, Yum signed a similar agreement with Sinopec in China to open its KFC restaurants at gas stations run by the latter.

As one of the largest home appliances retailers in China, Suning has a large number of stores across the country. Moreover, many of its stores are located in the centers of these cities.

Mark Chu, president and chief operating officer of Yum China division, said that Suning's stores are mostly located in core commercial areas, emerging commercial centers and transport hubs, enjoying advantages like large flow of people and quality property resources. Yum highly values the cooperation with Suning. The cooperation can give full play for both parties on business arrangement, chain store management, brand influence, as well as better meeting customers' needs.

According to information disclosed by Yum, in the next few years, the company will maintain the expansion speed of opening at least 600 new outlets each year. At present, Yum and Suning have started cooperation trial in some regions. By April 2012, Yum had opened 17 KFC and Pizza Hut restaurants in Suning stores in Nanjing, Beijing, Shanghai, Shenyang, Dalian, Kunming, Changchun, Weihai, and Yancheng.

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