Big STORM coming in the Pizza Market in China
Domino’s Pizza plan to open 420 new stores in China
Domino’s Pizza has unveiled ambitious plans to open 420 new stores in China, with 180 set to launch this year and an additional 240 in 2024. The company recently celebrated the simultaneous opening of new outlets in Qingdao, Changzhou, and Wenzhou, bringing its total store count in China to 638 across 20 cities as of April 30. These new locations will prioritize online channels, focusing on delivery and carryout services, which DPC Dash, the master franchisee, aims to replicate in other Chinese markets.
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The announcement follows the successful initial public offering (IPO) of DPC Dash in Hong Kong in March, which raised approximately HK$626.7 million (US$80 million). DPC Dash has been operating Domino’s Pizza stores since December 2010 when it acquired the master franchisee for several Chinese provinces, Pizzavest China Ltd.
In June 2017, DPC Dash renewed its master franchise agreement with Domino’s Pizza International Franchising and expanded its territory to encompass mainland China, Hong Kong, and Macau.
Frank Paul Krasovec, the director and chairman of DPC Dash, expressed that the newly raised funds will enable the company to aggressively expand throughout the Greater China region, reaching millions of Chinese customers.
On October 14, Domino’s China hit a record high in revenue growth.
- In the first half of 2022, the Pizza Firm amassed a 909 million RMB ($126 million),
- an increase of 18.6% from 767 million RMB ($106.6 million) in the first half of 2021.
As part of their growth strategy, DPC Dash also announced the appointment of Arthur Patrick D’Elia, Executive Vice President International at Domino’s Pizza, as a non-executive director of the company. D’Elia, responsible for overseeing Domino’s business in more than 90 countries, will bring his expertise to support DPC Dash’s expansion plans and further strengthen their partnership with Domino’s Pizza.
The Chinese Pizza Market
The pizza market in China has witnessed significant growth in recent years, driven by changing consumer preferences, urbanization, and the increasing popularity of Western fast food. As Chinese consumers embrace international cuisines, pizza has become a favored choice, especially among younger demographics.
The market presents both opportunities and challenges for franchise businesses looking to establish a presence in China.
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China’s vast population and growing middle class offer immense market potential for pizza franchises. As disposable incomes rise, consumers are increasingly seeking convenient, affordable, and international dining options.
- Adapt to Local Tastes: While maintaining the core essence of your pizza brand, consider adapting to local tastes and preferences. Introduce flavors and toppings that resonate with Chinese consumers while ensuring consistency with the brand’s identity.
- Embrace Digitalization: The Chinese market is highly digitalized, with a strong emphasis on online ordering and delivery services. Invest in robust online platforms, mobile apps, and partnerships with popular delivery platforms to provide seamless and convenient ordering experiences.
- Huge Investment in Marketing: Develop targeted marketing campaigns that resonate with the Chinese audience. Leverage social media platforms such as WeChat, douyin, Red, Kuaishou to engage with customers, promote Deals (Chinese loves dela) and build brand loyalty.
- Focus on Quality and Food Safety: Chinese consumers place great importance on food safety. Highlight the quality of ingredients, food preparation standards, and adherence to strict hygiene practices to build trust and confidence among customers. Food Safety is a priority in China.
- Strategic Location Selection: Conduct thorough market research to identify prime locations for franchise outlets. Consider areas with high foot traffic, proximity to residential and commercial areas, and target consumer demographics.
- Build Strong Supply Chains: Establish reliable supply chains to ensure consistent access to high-quality ingredients. Partner with reputable suppliers who can meet demand and maintain quality standards.
- Training and Support: (necessary n China) Provide comprehensive training and ongoing support to franchisees, ensuring they understand the brand values, operational standards, and customer service expectations. Regularly assess franchisee performance and offer guidance for improvement.
- Competitive Pricing: (you need that in China) While maintaining profitability, consider pricing strategies that are competitive in the local market. Conduct pricing research and analysis to strike a balance between affordability and profitability.
- Localization of Operations: Adapt operational processes to align with local regulations, labor practices, and business customs. Employ local staff to enhance customer service and cultural understanding.
Launching a franchise business in China
Remember, launching a franchise business in China requires careful planning, adaptation to local market dynamics, and building strong relationships with local partners and customers. Success in the Chinese pizza market will come from a combination of quality products, effective marketing strategies, operational excellence, and a deep understanding of the local consumer landscape.
