October 25, 2004

Yum! Expands In China

Yum! Brands International Greater China has signed a renting agreement with Xinjiang Wuika Group, a subsidiary of Hong Kong Wuika. The deal means that Pizza Hut, the world largest pizza store chain, will enter Xinjiang for the first time, according to Comtex.

In recent years, the rapid development of Xinjiang and the favorable investment environment have been attractive to many multinationals. Especially after China joined the World Trade Organization (WTO), more and more world-renowned corporations have been taking part in the development of China's western regions.

Pizza Hut executives said they were “confident”of the prospect for the emerging markets in western China. The chain’s entry will also stimulate the development of the catering industry in Urumqi, capital of Xinjiang Autonomous Region. The first Pizza Hut, in Urumqi, will start operation in February of next year.

Pizza Hut entered China in 1990. So far, it is operating over 140 chain stores in more than 40 Chinese cities, and it has a local work staff of 10,000. What's more, Pizza Hut owns 13,000 branches in over 90 countries and territories worldwide.

Yum! Brands execs also said they plan to place KFC units in small cities in China in 2005. On the other hand, the company will not plan to launch A&W in Chinese market within five years. Yum! needs time to re-position A&W and to adjust its price and product structure.

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