China Retail

Papa John's competing with Yum for the pizza market

Papa John's, the Louisville, KY pizza chain with over 3200 stores in 28 countries around the world, recently announced plans to open 500 stores in China over the next 5 years. This will make China it's most important international market. They currently have 100 stores throughout China now and are closing their gap with Yum Brands, who have 350 Pizza Huts and over 2000 KFCs now in China.

It's interesting to note the way Papa John's are positioning themselves clearly mid-level. They've chosen a lot of 2nd floor street locations a block away from the major action. They are often in clusters with local and Taiwanese franchises. This makes them easy to find and family style. Just look for the Baodao eyeglass store, and chances are Papa John's is upstairs. I rarely see them on an expensive ground floor corner spot like Pizza Hut, who've gone decidedly upscale. When you eat at a Pizza Hut in China you feel like you are on a date and going to get prime rib. When you eat a Papa John's, you're definitely at the strip mall.

In China, we don't have strip malls - yet, but usually the first floor of most buildings along the street are smaller retailers, giving the same effect. For non-New Yorker's it might seem a bit intense. Here's what's on the street outside my window in Beijing now: the cigarette and liquor shop, a half dozen restaurants, a pharmacy, two massage parlors, a hair salon, a DVD shop, a pipe store, a sink and toilet store, a convenience store, an eyeglass store, a pink light place (that's where three women in nighties sit on a couch watching TV and knitting until a customer walks in), a few boutiques, a shoe store, a couple of real estate brokers, a kitchen supplies store, a fruit shop, a locksmith, and that's just looking to the east.

April 21, 2008

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