The Implications of Exporting a Drive-Thru Culture

Discussion
Jun 21, 2006
Al McClain

By Al McClain


By now, you’ve likely read that McDonald’s is partnering with a state-owned Chinese petroleum company, Sinopec, to open fast food restaurants at some of 30,000 gas stations in
China. The announced plan is to open 100+ outlets with drive-thru’s in China per year for as long as the market will bear it.


This seems simple enough: China is in an extreme rapid-growth phase; the Chinese are buying cars at a record pace; Chinese consumers are becoming more and more Americanized –
i.e., in a hurry; multitasking; trying to make money, etc.


From a financial perspective, it’s a no brainer. Auto sales in China grew 30 percent last year
(USA Today). McDonald’s is partnering with a company that knows the real estate market and is adding 500 service stations a year (USA Today); China is the world’s
fastest growing car market (Bloomberg); and restaurant sales rose nearly 18 percent last year (Bloomberg).


Although McDonald’s presence in China is currently dwarfed by Yum! Brands KFC unit, it seems that this partnership has the potential to change that in a hurry. And, while only
one in five people in China regularly eat fast food (Access Asia research) and only 10 percent of fast-food meals in China are take-away (WSJ), McDonald’s is already averaging
30 percent drive-thru sales at its test units. One would think that Chinese consumers will embrace fast food drive thru’s just as they have cars over traditional bicycles.


Yet, there is more to think about.


Moderator’s Comment: How much cultural indoctrination will it take
to make U.S. retailers like McDonald’s a full-blown success in China?


According to the WSJ, only 10 percent of China’s fast-food restaurant business is take-away. With the idea of grab-and-go so foreign, it won’t be
enough for McDonald’s to pepper China with drive thrus; it’ll need to do a good bit of customer training. Restaurant place mats and flyers, for example, reportedly explain how
it all works: “A brand new way of dining. It’s fashionable and time-saving.” And TV commercials portray customers in the process of ordering, so people grasp the concept. McD’s
even has attendants stationed in parking lots to wave drivers toward the drive thru lanes.


Clearly, McDonald’s isn’t just importing American food; it’s paving the way to adoption by teaching American culture. A bit scary to have that responsibility,
don’t you think? And then, there is the issue of whether this is the best element of American culture to be exporting. But, that’s another story.

Al McClain – Moderator

Please practice The RetailWire Golden Rule when submitting your comments.

Join the Discussion!

11 Comments on "The Implications of Exporting a Drive-Thru Culture"


Sort by:   newest | oldest | most voted
Ryan Mathews
Guest
14 years 8 months ago

There’s more than a little cultural conceit in the question. It’s more likely that McDonald’s will become successful by becoming more “Chinese” than it is that the Chinese themselves can be converted to an American lifestyle. Throughout its history, China has always been successful in absorbing what it viewed as barbarians. I trust it won’t be much different this time around.

Stephan Kouzomis
Guest
Stephan Kouzomis
14 years 8 months ago

A Chinese partner and McDonald’s Asian management will handle the success very well, thank you.

And by the way, the per capita ownership of cars in China will exceed the US shortly. Drive thru. Hmmmmmmmm

Mark Hunter
Guest
Mark Hunter
14 years 8 months ago

Let’s not assume anything is a slam-dunk; what seems logical to people in the US can seem very odd in places you least expect it. Take the consumption of portable beverages; in the US it’s very normal to walk around with a beverage such as water. In Italy it’s consumed as part of a sit-down event. Or even something as mundane as ice, we in the US demand it with any cold drink, in Europe soda is never served with ice. The list goes on and and every US company that has ventured into other countries has at least one problem arise that they were not expecting.

Kai Clarke
Guest
14 years 8 months ago

McDonald’s foray into China will be very successful and accepted with open arms. All things Western, especially fast food are very popular in China. Traditional McDonald’s are very busy in any major city which I have seen them in when traveling in China. However, McDonald’s must be certain to include traditional, regional fare as a part of their offerings when determining what needs to be included as part of their menu. They will need to promote the concept, but it is not as foreign as we might believe. Chinese have seen drive-through restaurants in our TV and Movies for years.

Karin Miller
Guest
Karin Miller
14 years 8 months ago

This sounds like a good long-term strategy. The Chinese people have already shown that they like American fast food, and gas stations offer easy access to the fast-growing upper-middle class and wealthy segments of society.

I would imagine that McDonald’s is also considering the number of Chinese people converting from bicycles to motorbikes, another vehicle that must visit the gas station. This mode of transportation is much more prevalent than the car and often simultaneously provides transportation for multiple people and lots of stuff.

Don Delzell
Guest
Don Delzell
14 years 8 months ago

I agree with Ryan. Never underestimate the strength of the Chinese culture. It bends, it adjusts, it even changes appearances. Yet, as the Mongols found, at the end, what is left is ineffably Chinese.

I am not the most traveled of our correspondents, but I have been to China many times. One observation I have is that the homes of the vast majority of people do not conform to the Western notion of home. Home for many Chinese is simply shelter. One reason dining out is such a mainstay of the culture, whatever the price level, is that it gets people out of their overcrowded homes.

While “fast” is part of China, you still need somewhere you want to take the food to. And please, McDonald’s, whatever you do, don’t encourage the Chinese to eat while driving. Driving is already a full contact sport.

Bernice Hurst
Guest
14 years 8 months ago

Doesn’t it all depend on whether or not the Chinese government approves? After all, if they begin to suspect that the fries contain secret ingredients that influence behaviour, Macdonald’s had better watch out for staff being carted off for interrogation.

Mark Lilien
Guest
14 years 8 months ago

Most American McDonald’s locations are suburban, in places where cars are the customers’ transportation. The proportion of self-driving suburban Chinese is very low, although even a small percentage of such a large population can become significant. The motivation for McDonald’s drive-through education program is clear: McDonald’s can make more money if they don’t have to seat a high proportion of their customers. Given McDonald’s success in so many other countries around the world, it’s a good bet they’ll do fine in China, too.

Camille P. Schuster, PhD.
Guest
14 years 8 months ago

Any business currently operating in China that is market-driven has presented a new way of doing business in China. McDonald’s will not be the first or last. They do not bear the responsibility of introducing “American” values to China. Those values are already there from other US companies doing business there and from American entertainment. Adding food and stores to gas stations was a new concept in the US at one time – not many people thought of buying lunch at a gas station. Now it’s common. The Chinese will absorb much of the concept and adapt it to a uniquely Chinese lifestyle. McDonald’s has demonstrated its ability to keep core food products and company concepts while adapting to local markets (e.g., veggie burgers in India, fried rice in Japan, wine in France). With a continued philosophy of retaining core values and adapting to the local culture, McDonald’s has every chance to be highly successful with this new venture.

John Lofstock
Guest
John Lofstock
14 years 8 months ago
McDonald’s has been down this road before in the U.S. market with its Small Town Oil program, which it launched around 1998 with companies like Chevron and Warring Oil. The program wasn’t as successful as you would expect from a company that has such strong brand recognition for a number of reasons. First and foremost, the company wanted too much control over items like the coffee bar and the soda fountain, two enormously profitable area that convenience store retailers and petroleum marketers were reluctant to give up. Second, it went with a limited-menu format, leaving off popular items like the fish sandwich and some others. If they have learned from these mistakes, and it’s hard to tell if they have in the U.S. market because there are so few co-branded McDonald’s sites left, they should have moderate success in China. But if they again try to force their format onto the market, I think they should expect similar results. I think it was Benjamin Franklin who said, “The definition of insanity is doing the same… Read more »
Richard Beal
Guest
Richard Beal
14 years 8 months ago

I lived in Singapore when the first McDonald’s was opened. It was so successful there were long lines (+1/4 mile) and they soon ran out of food after 2 or 3 days.

Sure hope they’re ready for this….

wpDiscuz

Take Our Instant Poll

Do you think McDonald’s emphasis on drive-thrus in China is a good strategic move?

View Results

Loading ... Loading ...