The fast-food market size in China was worth RMB 1.3 trillion in 2022 and is expected to reach RMB 1.8 trillion in 2025. This growth can be attributed to urbanization, rising disposable incomes, and increasingly busy lifestyles. Young adults aged 25 to 34, making up 44% of fast-food consumers, find fast food a convenient choice when time is limited, and many companies lack in-house dining facilities. Fast-food establishments cater to this need by offering quick meal options for these office workers. While global fast-food chains still dominate the market, China’s local fast-food industry has surged in recent years, with standout performers such as Tastien making their mark.
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McDonald’s and KFC’s dominance in China
McDonald’s, KFC, Burger King, and Wallace (华莱士) collectively dominated the market, accounting for more than 90% of the market share in 2022. McDonald’s and KFC have emerged as the leading favorites in China’s fast-food landscape, boasting extensive footprints with a combined total of over 4,905 and 8,675 restaurants in China, respectively, as of the third quarter of 2022. These global fast-food giants have achieved impressive success within the Chinese market, primarily due to their early entry, well-established brand recognition, and their willingness to adapt to Chinese tastes. For instance, KFC offers congee, egg tarts, and youtiao (油条), showcasing its commitment to tailoring its offerings to local preferences.
Beyond their stronghold in first- and second-tier cities, international fast-food chains have strategically expanded into third- and fourth-tier cities, driven by the saturation observed in high-tier urban markets. A case in point is McDonald’s, which significantly ramped up its expansion efforts in the latter half of the 2010s. In 2018, McDonald’s unveiled 423 new locations in China, with an impressive distribution, as nearly half of these establishments found their place in third- and fourth-tier cities. Likewise, Wallace has more than 15,000 stores nationwide, including more than 10,000 stores in third- and fourth-tier cities.
From noodles to burgers: the main players in China’s local fast-food industry
Homegrown Chinese fast-food chains like Dicos (德克士), Yonghe King (永和大王), and Real Kung Fu (真功夫) have established strong brand recognition since the 1990s, offering a diverse range of menu items that blend both Western and traditional Chinese cuisine. Dicos, often seen as a local rival to KFC, not only serves chicken burgers but has also recently ventured into the world of plant-based burgers by partnering with a local artificial meat company.
Yonghe King and Real Kung Fu thrive by catering to local tastes. For instance, Yonghe King offers dumplings, noodles, and hearty stewed pork rice dishes, mainly in eastern China. Meanwhile, Real Kung Fu stands as one of China’s oldest fast-food chains, specializing in rice bowls paired with steamed dishes.
Certain local fast-food chains have struck a balance between Western-style burgers and Chinese flavors, as exemplified by Tastien. It was founded in 2012 and has since gained recognition for its renowned “Chinese burger” – a fusion of both culinary worlds.
The unique appeal of homegrown fast-food chains
Chinese local fast-food chains distinguish themselves from international chains by highlighting the craftsmanship embedded in Chinese cuisine. For example, Yonghe King freshly grinds its soy milk every four hours. This commitment to authenticity not only showcases a deep appreciation for tradition but also underscores dedication to quality, elevating the fast-food experience beyond mere quick meals.
China’s local fast-food industry also offers a sense of familiarity and nostalgia that international chains may not provide. Moreover, they leverage a deep-rooted national pride, emphasizing their dedication to using high-quality, locally sourced ingredients and actively engaging with local communities. One example is Dicos, which annually hosts “Dicos’ Family Day” since 2014, promoting family reunions and fostering “harmonious parent-child relationships.” This type of event strongly resonates with consumers, recognizing the paramount importance of the family institution in Chinese culture.
Challenges faced by domestic fast-food chains
Despite their strong local presence, domestic chains face challenges in a competitive market. They must compete with global brand recognition and the financial resources of international giants. The challenges also encompass maintaining high-quality standards and expanding their operations rapidly. Furthermore, certain Chinese consumers place greater trust in foreign brands when it comes to food integrity, as they perceive these brands as being less inclined to engage in dishonest practices. Some Chinese consumers are also skeptical due to past domestic food scandals such as tainted baby formula, fake eggs, and mislabelled meats.
Tastien: the “Chinese burger” king
Tastien’s rebranding and rapid rise
Tastien, a prominent player in China’s homegrown fast-food industry, has carved a niche by focusing on Chinese-style burgers, featuring handmade flatbreads and unique fillings like Peking duck (北京烤鸭) and Mapo tofu (麻婆豆腐).
The brand made its debut in 2012 as a pizza chain, but it truly took off across China starting in 2021. This surge coincided with their commitment to “express Chinese culture with Chinese taste” ( “用中国味道表达中国文化”) and the introduction of Chinese burgers featuring handmade buns. As of October 2023, Tastien had over 4,000 stores across 22 provinces and 331 cities, surpassing Burger King, Pizza Hut, and Dicos.
Pricing power and strategic expansion
Initially focused on lower-tier cities, where the presence of international fast-food chains was limited, Tastien has expanded its footprint to include first-tier cities. The brand’s competitive pricing, especially when compared to international chains, has positioned it favorably among budget-conscious consumers. This affordability has been a key factor driving Tastien’s rapid growth and success in the highly competitive Chinese fast-food market.
A Weibo user, for instance, pointed out the stark difference in prices between Tastien and Shake Shack, highlighting that promotional offers at Tastien can bring the cost of a burger down to just RMB 3, in contrast to Shake Shack’s RMB 38 for a basic hamburger.
Tastien rides the Guochao trend
Besides its famous Chinese burgers, Tastien rides the Guochao wave in many other ways. It has successfully implemented a Guochao style of branding, packaging, decoration, and slogans. This style resonates particularly well with Gen-Z, the primary consumers of fast food in China, and the main consumers of Tastien according to Baidu Index.
Tastien strategically incorporates Chinese red as its brand color to accentuate a “Chinese style” and foster an authentic oriental aesthetic. The store design is characterized by the prominent use of the eyebrows of the Chinese lion, serving as a central visual element. The incorporation of cultural elements not only aligns with the brand’s commitment to Chinese taste but also enhances the overall brand identity, creating a distinctive positioning in the minds of consumers.
Consumers overwhelmingly express enthusiasm for Tastien’s dedication to showcasing its Chinese roots. On the popular review platform Dazhongdianping (大众点评), numerous consumers praise Tastien’s Chinese-style bread, applauding its authenticity and unique taste. Additionally, consumers commend the inviting atmosphere within Tastien’s stores.
Tastien’s showcases its Chinese roots through collaborations
Strategic partnerships with local celebrities, such as the rapper Vinida (万妮达), have further bolstered Tastien’s brand visibility. The selection of Vinida is a strategic choice as she consistently ventures into unexplored domains and adeptly blends rap music with her native Fuzhou dialect. Her innovative approach and profound ties to local culture perfectly represent the Tastien brand ethos.
Tastien’s playful engagement strategy on social media
Tastien has harnessed the power of social media and gained a strong following on Weibo, Douyin, and Xiaohongshu where the brand has a cumulated 2.7 million followers. Tastien takes a highly engaging approach in its online interactions with netizens, responding to comments with lively emojis. The official accounts not only share updates on special promotions but also keep the online community entertained with funny memes. This active and dynamic online presence showcases Tastien’s commitment to fostering a lively and enjoyable interaction with its audience, creating a fun and relatable brand persona that resonates well with customers.
Tastien’s rapid expansion in China’s local fast-food industry:
- China’s fast-food market is undergoing remarkable growth, with a projected expansion to RMB 1.8 trillion by 2025. This surge is attributed to factors such as urbanization, rising disposable incomes, and the fast-paced lifestyles of young adults.
- Within this competitive environment, local Chinese fast-food chains have carved out a distinct space. Established in the 1990s, chains like Dicos, Yonghe King, and Real Kung Fu blend Western and traditional Chinese cuisine.
- What sets local chains apart is their emphasis on craftsmanship in Chinese cuisine, showcasing authenticity and quality. They also tap into a sense of familiarity, nostalgia, and national pride, participating in community events that resonate with Chinese consumers.
- Tastien has become a notable player, gaining recognition for its unique “Chinese burger”. The brand stands out with its strategic integration of Chinese cultural elements, from its use of the color red to collaborations with local celebrities like rapper Vinida.
