Anyone can be a hometown hero. Sticking to what you know is basic Life Lessons 101. You know you’ve really made it big, on the other hand, when you can captivate the attention of an entirely new audience. China is frequently mentioned as a benchmark of success for western franchises –McDonald’s and Subway are clamoring for more locations, and even Panda Express is planning its Eastern Invasion tour.
Yum Brands is one franchise conglomerate that has accomplished the transcontinental feat with an impressive amount of finesse. Meanwhile, Little Sheep is a franchise born and raised in China that is now holding its own across the sea. It’s such a match made in heaven that, at this rate, the most logical step for total world domination is simple to merge and become one. Incidentally, that’s exactly what they’re planning to do.
To us, the interesting part of the Yum! Brands / Little Sheep equation is their different approaches on differing sides of the Pacific Ocean: where one brand found approval in distant lands by tailoring its menu and image just for new audiences, the other has found its niche by remaining by and large exactly the same.
LITTLE SHEEP GOES WEST
Little Sheep is more than just a name that conjures up adorable Easter-based images. The Chinese food production company, based out of Baotou in Inner Mongolia, is widely known throughout Asia for its wildly successful chain of casual Mongolian hot pot restaurants, boasting hundreds of locations throughout China including outposts in Hong Kong and Taiwan.
That the Little Sheep brand is a hit with consumers is quite the understatement. The chain has raked in a slew of reader’s choice awards including back-to-back “favorite hot pot” awards in U Magazine’s restaurant elections and the top “popular restaurant” honors on Hong Kong restaurant review site OpenRice for three years running. But consumers aren’t Little Sheep’s only fans in China: the chain has received some major business accolades as well, including recognition for its superior investor relations and pioneering green initiatives, and has been consistently named one of China’s top ten franchises.
Over the past couple of years, Little Sheep has set its sights on broader horizons, first moving east with eight locations in Japan, then crossing the International Date Line to build five hot pot shops in Canada and seven in the United States (with three more under construction, including one in New York).
Little Sheep hasn’t had to do much in the way of changing in order to get new customers’ attention. Our taste for Asian cuisine is already well-established, and its franchise nature keeps Little Sheep from venturing too far into niche ingredients no matter where it is. In a statement from Little Sheep, Union City location manager Daniel Huang asserted that the restaurant wouldn’t need to change its menu to meet rising health standards, either. “Hot pot is fresh and healthy,” said Huang, adding that – unlike greasier faux-Chinese alternatives – Little Sheep’s vegetables are seasonal and fresh and its soups are free of MSG and unsavory trans fats.
In fact, the only real area Little Sheep claims to have worked on for its overseas customers is customer service – to meet the western demand for attentiveness, the staff trains for an hour every weekend just to learn how to better acclimatize newcomers to the Mongolian hot pot experience. All in all, it’s paying off, and while there may not be a Little Sheep in every major city yet, a partnership with Yum! Brands could give it just the financial boost it needs.
YUM! BRANDS HEADS EAST
Who could forget when pictures of Pizza Hut Japan’s “Double Roll” specialty pizza started making the rounds on the internet? Loaded down with everything from mini hamburgers and corn to a maple-glazed cheese and bacon-wrapped hot dog stuffed crust, the abomination was both horrifying and absolutely tantalizing. It also brought a lot of attention (as the internet does every so often) to the kind of crazy amazing things Yum! Brands is doing across the Pacific while we’re not looking.
Some of the franchises supported by Yum! Brands can’t do much in the way of adaptation – there’s not much you can change about a bean burrito to give it an Asian aesthetic, which may be why Taco Bell has yet to really take off overseas. Pizza and chicken, however, are ripe for the picking (and are both already favorites in Asia, as the Korean influenced Pizza & Chicken Love Letter chain would suggest).
A look at China’s KFC menu is quite literally a window into another world of cuisine: hungry patrons can choose from the usual chicken sandwiches and mashed potatoes or a shrimp burger and Szechuan beef wrap with egg and vegetable soup. Breakfast options include American sausage muffins or traditional congee and soy milk. Pizza Hut Japan’s menu is no different. Pizzas piled high with shrimp, calamari rings, and mayonnaise stand boldly alongside the usual pepperoni and Veggie Supremes, while side dishes include potato wedges or Mentaiko spaghetti in a creamy tomato sauce laced with nori and cod roe.
Does all this tailoring work? You bet. Bloomberg recently reported that 36 percent of Yum! Brands’ $2 billion operating profit in 2010 came from China. Pizza Hut Japan has seen similar results and its cuddly mascot, Cheese-Kun, has even attracted a cult following and guest sponsor cameos on popular anime series Code Geass: Lelouch of the Rebellion.
The moral: know your audience, and know when – and how much – to adapt. In some cases, you may find that tradition works best; in others, you may find that switching up the game plan could be exactly what you need to make it big.