Some of America’s most familiar fast-food chains are making big bets on China. McDonald’s expects to have 10,000 restaurants in China by 2028, while Wendy’s plans to open as many as 1,000 over the next decade. Customers lined up in the rain for the first Church’s Texas Chicken to open in Shanghai, and Five Guys drew waits of more than two hours when it opened in Beijing. KFC has already shown just how far that expansion can go. The American chain now has about 13,000 restaurants in China, compared with roughly 3,750 in the United States. For these companies, expanding around the world offers a chance to find new customers far from home.

China is especially attractive to American fast-food chains because demand for easy, affordable meals is growing. And American companies are not the only ones chasing that opportunity. Burgers were once mainly a Western import, but Chinese restaurant companies are now jumping into the market, too. Hotpot chain Haidilao recently launched a new burger-focused chain, while Chinese coffee company M Stand has opened burger shops in some cities. Smaller households, busy schedules and cautious spending have helped make inexpensive meals more appealing for small families. One Beijing father explained why he regularly takes his son to McDonald’s between classes: “When you want food that's clean, quick and something children don't get bored of, nothing is better than a burger.”

As American fast-food companies expand in China, they are not simply selling Chinese customers the same food they sell at home. Companies study consumers in each country and change their businesses to fit local tastes. KFC restaurants in China serve Original Recipe chicken and french fries alongside egg tarts and congee, a savory rice porridge. Now some Chinese companies are facing the same challenge in reverse as they expand into American markets. Wallace built more than 20,000 restaurants in China by selling burgers and fried chicken, but it still had to adapt its chicken sandwich recipe for U.S. customers. Chinese fast-food companies including Mixue, Luckin Coffee and Heytea are also expanding here, putting American consumers on the other side of a global trend. 

Questions: 

  1. Why are American companies expanding operations into China?

  2. What sort of challenges do you think Chinese companies will face as they expand into American markets?