*It’s astonishing how fast the Chinese people are giving up on 10k KFC, 7k Starbucks & 6k McD outlets 🙌🙌* And that too, all in favour of the local competitors. This is a serious deal, which I hope also plays out in India. .. *Take McD & KFC competitor Tastien, which has opened a whopping 1.6k outlets in the last 6 months.* -> That’s more than 3 times the total no. of McD outlets that have been launched in India to date, all opened by this Chinese player in just the last 6 months -> In fact, it now operates 7k outlets in China, more than McD Similarly, another competitor, Wallace, is more than 3x larger with >20k outlets! 🙌🙌 .. *Let’s move to Starbucks, which has 7k outlets in China.* -> Nine months ago, its Chinese competitor Cotti hit 6k outlets -> But, more importantly, it announced that by 2025-end, it shall hit the 20k mark -> This means that it will open 20 outlets every day! Crazy! Other local competitors are also expanding rapidly. Luckin Coffee has surpassed 8k outlets. And Mixue has hit 36k outlets. *Thirty-Six Thousand!* 🙌🙌 .. *And all of these Chinese players have two standard features.* One. They are often much cheaper versions of their Western counterparts. For example, Luckin sells some of its coffees at a third of Starbucks’ prices. Mixue & Cotti even lower. .. *Two.* Geography! Most homegrown chains come from places other than China’s rich megalopolises, such as Shanghai & Beijing. -> Cotti & Wallace opened their first outlets in Fuzhou, a Tier-2 city -> Tastien was also founded in a Tier-2 city called Nancheng. In fact, ~50% of Tastien’s outlets are in Tier-2 & Tier-3 cities -> Luckin’s rapid growth has also been driven by its expansion in these relative backwaters. Starbucks, meanwhile, has barely ventured beyond the most prominent Chinese cities in the past two years .. *Such chains are expanding most aggressively in cities like these, partly because Western rivals have historically ignored them.* And presently, I know at least one major Indian cafe chain applying this formula. Barista! 🙌🙌 .. *Back to China, foreign rivals are catching on.* -> In the first quarter of 2024, ~60% of new Chinese KFCs and Pizza Huts opened in Tier-3 or smaller cities -> Most of the 4,000 new outlets that McD is planning to open by 2028 are also planned to be in smaller towns But, anyhow, the shift towards local brands reflects a growing sense of national pride and cultural identity among the Chinese. Plus, these Chinese chains have created a massive lot of jobs in lower-tier cities, which foreign brands have traditionally overlooked. What do you think? .. *Support my work:* https://t.ly/SUPPORTjay *Check my work with:* - 3.1k+ on Decoding The Dragon (https://t.ly/chnwj) - 2.7k+ on Deepdives with Jay (https://t.ly/dwj) - 2.2k+ on BharatNama (https://t.ly/bwj) Best, Jayant Shilanjan Mundhra