Late last year, McDonald's, the global fast food behemoth that has been lagging KFC in China, announced it will open 175 stores this year, but recently, reduced the target to 150, citing the economic recession in China.

But media reports said the true reason behind the scaling down is the unsatisfactory sales in China market. From January to March, McDonald's global sales grew by 4.3 percent year-on-year, while the US grew by 4.7 percent. Although sales from Asia, Mideast and Africa went up by 5.5 percent, there was a drop in China. McDonald's CEO attributed the decline to the price-cut it launch in China since late 2008.

But the explanation seems unconvincing. Despite the promotion programs it conducted this year, KFC also earned a lot in China. In its financial report, Yum!, the parent of KFC, said its sales per store surged by 1 percent during the first quarter. Sales per store from the United States dropped by 2 percent, but it was a positive growth of 2 percent for the Chinese mainland.

"The large network we have in China has helped us save quite a lot in purchasing raw materials, and the high brand awareness helped us attract more customers," said Han.

McDonald's had 1,000 restaurants by 2008 in China, half of what KFC had. AC Nielesen has also ranked KFC among the Top 10 favorite global brands of Chinese consumers.

(China Daily June 17, 2009)