Global fast-food chain McDonald's has been actively transforming its restaurants in China into European-style outlets in order to attract young people in urban areas. In 2011, 100 McDonald's outlets underwent such transformation and 80% of the outlets in China will undergo the renovation by 2013.
The new European style is intended to reflect simplicity, in contrast to the American restaurant's traditional style that reflects a high-tempo lifestyle.
"We want to attract young people and make them loyal supporters of the simple and happy lifestyle," remarks Zeng Qishan, CEO of McDonald's China.
Last year, several outlets in Beijing and Shanghai installed independent coffee corners. The ongoing renovations involves more fundamental change, including the arrangement of seats, artwork and lighting.
Since its entry into the Chinese market, McDonald's has embraced the company's classical yellow and red colors in the decor of its outlets, winning over many children, their parents and other people who like bright colors. Now McDonald's wants to tap the potential for business meetings and gathering of friends. Its new target customers are young people aged 18-28.
In order to poach customers from coffee chain Starbucks, McDonald's will offer free Wi-Fi internet access service at its outlets in Beijing, Shanghai, Guangzhou and Shenzhen starting in April.
McDonald's has launched a new slogan: "Reserve some space for happiness," stressing the slow pace of drinking coffee, in sharp contrast with their old mantra, "I'm lovin' it!"
To support the transformation, McDonald's increased capital outlay by 35% in 2011 and will boost the outlay by 40% more in 2012. So far, the company has invested 7 billion yuan (US$1.1 billion) in China. A majority of the expenditures have been in opening new outlets and upgrading corporate image.
McDonald's has more than 1,000 outlets in China, compared with more than 3,000 KFC restaurants. However, its profit margin is five times that of Yum! Brands, which operates KFC and Pizza Hut in China.
McDonald's plans to further step up its investments in China in order to tap the market potential resulting from the further urbanization of the Chinese population. China's urban population is set to top 700 million in five years. To capitalize on the trend, McDonald's plans to establish 1,000 additional outlets in China by 2013.