When it comes to fried chicken, the first thing you think of is probably KFC.
Who are KFC’s competitors in China? The first reaction of everyone is definitely McDonald’s.
But you probably wouldn’t have thought that thirty years ago, when KFC first entered Beijing and Shanghai, its rival in business was not McDonald’s, but Ronghua Chicken, a Chinese style fried chicken restaurant founded by a time-honored Shanghai brand.
How brave were the Ronghua chickens back then?
It should be noted that multinational catering giants such as KFC entered China, which was just beginning its reform and opening up policy and had luxury restaurants, which was a complete blow to reducing costs.
The local fast food brand born on the ground floor of a hotel, relying on its own research and development of “Chinese and Western” fried chicken legs with soy sauce, Fried Rice with eggs, hot and sour dishes, is actually able to compete with KFC. Moreover, it once gained the upper hand.
This massive commercial war has spread from Shanghai to Beijing, appearing on the news pages of major newspapers multiple times. There is still a heroic saying circulating in the Jianghu, “Wherever KFC drives, Ronghua Chicken also drives.
The “chicken fight” initiated by Ronghua Chicken even influenced KFC’s later dish design in China.
What we are curious about is: how did a local fried chicken brand from the 1990s compete with the global chain fried chicken giant Battle?
Why did the once glorious rooster disappear?
How profound did this magnificent chicken fight have an impact on the later Chinese fast food industry?
1、 Master the skills of the barbarians to make the fried chicken of the barbarians
In 1987, the first KFC in China grandly opened on Qianmen Street in Beijing. Three floors, 1400 square meters, with 500 seats, you can see Tiananmen Square from the large glass window – it was the largest KFC fast food restaurant in the world at that time.
At that time, the menu was very short, with only fried chicken, mashed potatoes in chicken sauce, shredded cabbage salad, round bread, soda, and beer. The set meal of two pieces of fried chicken with side dishes and drinks sold for 8.5 yuan, which was one-fifth of the monthly income of ordinary workers at that time.https://forum.stoneitech.com/
But KFC’s bright storefront, unified decoration, smiling service that is completely different from state-owned catering, and the freshness inherent in “foreign fast food” still have a huge attraction for the Chinese people.
After opening, KFC can sell over 2000 fried chickens a day. Back then, Kenmen believers could queue for an hour in the snow of Beijing. In the second year of opening, the annual sales volume surged to 14 million yuan.
KFC, with its explosive ability to attract money, was like a catfish, violently stirring up the Chinese catering industry at that time. Many people are not convinced:
I am a great culinary country in China, can’t I even make a piece of fried chicken as an American?
So, the nearby Cantonese restaurant Tiangong Restaurant launched a new product called “Chinese Pastoral Chicken” – yes, it’s not “Pastoral Crispy Chicken Burger”, but Tiangong Restaurant’s self-developed Chinese fried chicken, which is said to be marinated with over a dozen Chinese herbal medicines and fried in oil.
A group of brands such as Xiangfei Roast Chicken, Lingzhi Roast Chicken, and Huaxiang Fast Food Chicken joined the battlefield and fought happily.
This craze has also spread to Shanghai. At that time, Shanghai’s time-honored brand Ronghua Building was seeking transformation, and the store manager made a special trip to Beijing KFC to steal from it.
They carried a stopwatch in their pocket and quietly watched the employees’ actions as they queued: the chicken pieces were placed in the pot for 15 seconds, then flipped left, then turned right in 24 seconds, and finally flipped over and out of the pot. The oil temperature can be roughly guessed through bubbles.
I also bought a high-speed air pressure fryer from Beijing and tested the batter and seasoning formula. After consuming 200 chickens, Ronghua Building finally produced its own Chinese style fried chicken.
At this moment, KFC entered Shanghai and opened its first store on December 9, 1989 at the Dongfeng Hotel on the Bund.
At that time, the policy stipulated that foreign-funded enterprises must have local partners to operate in China. KFC Shanghai Branch cooperated with Shanghai Xinya Joint Venture Group (now Jinjiang International Group), and the address was chosen at Dongfeng Hotel under Xinya.
Ronghua Building, which had already made sufficient preparations in secret, quickly followed suit and opened a “Ronghua Chicken” fast food restaurant on the first floor of its own restaurant 19 days later, taking KFC by surprise.
As a local brand, Ronghua Chicken’s selling point lies in its Chinese characteristics: fried chicken only uses big chicken legs, and is marinated with more than 20 seasonings such as soy sauce, scallions, ginger, sand tea sauce, and light milk.
The side dishes of the set meal are not salad and bread, but Chinese style egg Fried Rice, pickled vegetables and green beans, hot and sour dishes and borscht soup, priced at 6.5 yuan.
At that time, Shanghai KFC had to sell two chicken combos for 12.7 yuan – the Chinese management believed that with inflation, prices would definitely rise in the future. To avoid approval trouble, it would be better to set a higher price at the beginning. As a result, Shanghai KFC’s pricing is 25% higher than Beijing’s.
The pricing strategy went wrong and faced challenges from competitors, causing KFC’s sales to plummet rapidly.
Ronghua Chicken, due to its compatibility with Chinese taste and its cheap and high-quality products, was immediately popular, with a daily turnover of up to 120000 yuan. Newspapers even featured news of “KFC’s defeat in Shanghai”.
In early 1990, KFC published an advertisement for “special offers”, announcing a price reduction of 9.9 yuan for two chicken combos.
Ronghua Chicken has won its first battle and has boundless scenery. It quickly opened a branch across from the “Big World” in Shanghai and learned from KFC’s chain management model.
The appearance and uniform are unified in red and white colors, which are eight points similar to KFC:
We also invested over 800000 yuan to open up processing plants and cold storage, process semi-finished products, and distribute them to our stores. This centralized kitchen unified distribution model was a novelty in the Chinese catering industry in the early 1990s.
In 1992, Ronghua Chicken took advantage of its popularity and entered Beijing. It opened a branch across from KFC in Qianmen, making it clear that it wanted to get Chinese style fried chicken and American style fried chicken.
At the opening, Jiang Xi, the former Executive Vice Minister of the Ministry of Commerce, personally wrote the banner “Ronghua Chicken dares to compete with KFC”. Ronghua Chicken shouted the slogan “Ronghua Ronghua, Rong Me China” again, which made people’s blood boil.
Under the influence of national sentiment, Ronghua Chicken lined up in a long queue just as it opened, and the KFC across from it was even somewhat desolate.
This scene is truly uplifting. It should be noted that the previous Chinese rural chicken and similar products have not posed a threat to KFC, and many people see Ronghua chicken as the biggest hope for local fast food to compete with foreign fast food.
Soon, more than twenty provinces, cities, and regions invited Ronghua Chicken to open stores, and even overseas branches in Singapore, Canada, and the Czech Republic were on the agenda. In the following years, Ronghua Chicken rapidly expanded and opened 22 stores nationwide.
The grand “chicken fight” not only made Ronghua Chicken famous, but also sparked a wave of fast food craze among Chinese and foreign brands. In Shanghai, there are the rise of Meilin Group and the top fried chicken from Taiwan, China.
The war situation in Beijing is also very fierce, with Lotte Lee from South Korea’s Lotte Group and Ed Bear, known as the “father of American fast food”:
Snow Mountain Beer Dew, waffles, and hot dogs were all the favorites of elementary school students at that time.
Of course, there are also familiar McDonald’s, Pizzahut, Subway, Delux… which were gradually spread in China in the 1990s.
Popeyes, a internet celebrity from a few years ago, briefly entered China in the 1990s.
2、 Why did Ronghua Chicken lose to KFC?
Just as fast food brands have emerged, Ronghua Chicken has started to decline.
In 1995, the revenue of Ronghua Chicken reached 50 million yuan, which was its final peak period.
Soon, because of the demolition and reconstruction, Ronghualou Head Office and West Nanjing Road Branch were closed one after another. After losing the two most profitable stores, this ethnic fast food brand quickly showed a decline.
In 1998, the number of stores in Ronghua Chicken had plummeted from 22 to 5-4 in Shanghai and 1 in Beijing, with a total revenue reduction of over 6 million.
Two years later, the last store in Beijing announced its closure, and the grand “chicken fight” that year ended with the lonely departure of Ronghua Chicken.
In the same year, KFC announced that it had 400 stores in China, ranking first among Chinese chain catering companies at that time.
Why did Ronghua Chicken lose to KFC? The demolition of stores and changes in the system are not as good as KFC’s “foreign style” and “decent”… of course, they are all influencing factors.
But the main reason is that Ronghua Chicken (and many Chinese diners at the time) saw the appearance of foreign fast food with a unified appearance and dishes, but did not realize that behind the “unity” of large chain fast food, there was a complete set of seamless standardization systems from supply chain, employee management to brand operation.
This is not a simple taste war, but a system and system war.
For example, in order to make the production of fried chicken more stable, Ronghua Chicken invested heavily in building a processing plant and cold storage, and processed semi-finished products to be transported to various stores. Compared to other Chinese restaurants at that time, there has been a significant step forward in standardization.
But KFC’s standardization started with raising chickens. In order to obtain the ideal raw materials for chicken nuggets, they can send people to live in chicken farms, from breeding and slaughtering to cutting hands and teaching, and even spend money to send suppliers to the United States for inspection
The processed semi-finished chicken pieces are delivered to the store, and there are also precise and eye-catching operating standards to ensure that every employee’s fried chicken is as neat and uniform as possible:
Another example: KFC requires fried chicken that has been fried for more than an hour and a half to be thrown away, cannot be processed at a low price, and cannot be eaten or taken home by employees.
At that time, in China, where supplies were not yet abundant, the implementation of this regulation faced great resistance, and even the Chinese management expressed that they could not understand it.
But KFC has set rules with a thunderous momentum, and some department heads have dealt with the remaining fried chicken at low prices to employees, who are directly fired by KFC.
Ronghua Chicken is much more frugal, and unsold fried chicken can be bought by employees at a low price. Unexpectedly, in order to collect the company’s wool, the employees actually intended to purchase more and fry more chicken legs, making it easier for them to bring leftovers home.
The waste of fried chicken from one or two stores can still be tolerated, but the cumulative cost of dozens of chain stores is also a considerable amount.
Furthermore, KFC attaches great importance to employee training, with corresponding learning subjects for each position and over 100 detailed assessment standards. In order to provide reserve personnel for more branches, the company also has a clear talent development plan and promotion track internally.
However, Ronghua Chicken did not have such an efficient training system, and it was not until the branch was opened that no one was available: “At that time, we used a direct sales model, and the headquarters had no details about the stores below. The managers and finance of each store were sent from Shanghai, and with too many stores, talent quickly fell behind
It can be said that compared to KFC, Ronghua Chicken is like a green sprout compared to a big tree with lush roots——
KFC and McDonald’s, with decades of experience in chain catering, have formed a mature and complete management model. As long as they adjust in a timely manner according to local conditions, they can operate smoothly.
When Ronghua Chicken was born, people were still confused about the concept of “fast food” and hastily learned some rules and regulations. At the bottom, it was still the business philosophy of state-owned hotels, which inevitably led to continuous pitfalls and omissions in details.
In addition to the restaurant itself, all aspects of agricultural product production, warehousing and distribution, store design, marketing and promotion were still in the embryonic stage at that time. McCann put in a lot of effort to gradually establish a complete supply chain in China, and it was even more difficult for Ronghua Chicken to achieve these goals at that time.
3、 After Ronghua Chicken, local fast food has found a new path
So, is the challenge of Ronghua Chicken still valuable?
Of course there is. On the one hand, Ronghua Chicken’s localized transformation of fast food has indeed gained popularity in terms of taste, and has also shown the industry the potential of Chinese fast food.
After Ronghua Chicken, Chinese fast food brands have sprung up like mushrooms: red sorghum, Malan Lamian Noodles, Xinya Dabao, Zhending Chicken, Zhenkungfu
At first, there were setbacks and successes, but after years of hard work, it has surpassed Western fast food and accounted for 80% of the fast food market.
KFC’s localization strategy has also been inspired to some extent by Ronghua Chicken.
At the beginning of the 21st century, KFC launched mushroom chicken Congee, old Beijing chicken roll, hibiscus fresh vegetable soup… These successful products catering to the Chinese stomach have become an important weapon for KFC to compete with McDonald’s.
On the other hand, the experience of Ronghua Chicken’s failure also became a lesson for later fast food brands.
Wallace, born in Fujian in 2001, started by imitating KFC, but did not confront it head-on. Instead, it took a low-priced route and occupied a sinking market that catering giants had not yet touched.
Be stingy with store rent, decoration, and raw materials, allowing employees to hold three or four positions, with low profits and high sales, further reducing costs with huge procurement volume
In this way, Wallace successfully controlled the pricing to less than half of McKen’s, found a “affordable hamburger” route suitable for small cities in China, opened 20000 stores crazily, and steadily became the leader of domestic fast food brands.
Later on, local hamburger brands found that they could no longer compete with Wallace solely due to their low prices, and then took up the weapon of Ronghua Chicken’s “localized taste” and began to develop Chinese hamburgers.
For example, Tastin Hamburg, which has emerged as a new force in recent years, took the China-Chic route, emphasizing its Chinese genes from the beginning of Hamburg embryo:
Then try to put Beijing roast duck, fish flavored shredded meat and Mapo tofu into the hamburger, and easily create a sound shaking explosive:
There are also emerging brands such as Jia Guolong Air Bread, Chu Zheng, and Lin Baobao, which have stirred up the local fast food market.
Looking back at the Ronghua Chicken of the past and raising its banner to challenge KFC, it is indeed a bit naive and naive.
But that was the first horn sounded by Chinese fast food brands, and in the years to come, clear echoes can still be heard.
