FOCUS: China franchise market

China Market
Overview of the Market.
Only around 13% of American
franchises have entered the
Chinese market though 15 of the
world’s top 20 franchises are
already active in China. With
foreign companies comes new
business systems and despite
foreign companies accounting for
a relatively small share of the retail
market, their business experience
produces highly improved
operating efficiency and profit
margins which outstrip their
domestic peers.
Only around 13% of American
franchises have entered the
Chinese market though 15 of the
world’s top 20 franchises are
already active in China. With
foreign companies comes new
business systems and despite
foreign companies accounting for
a relatively small share of the retail
market, their business experience
produces highly improved
operating efficiency and profit
margins which outstrip their
domestic peers.
The rise of the Chinese consumer:
With the ever increasing growth in
the middle-class (300 million as of
2012) combined with a maturing
consumer, the Chinese are
becoming a demanding society
for new products. These
economically empowered,
sophisticated consumers require
more than basic goods to satisfy
their desires and many display
their wealth through the purchase
of foreign brands. To be seen
carrying a Starbucks coffee on the
way to work is really middle class
cool.
In a nutshell, these ripe malleable
consumers are young, often have
a double income, are forward
thinkers looking to attain a
modern lifestyle and broaden
horizons. As an international
franchisor there is a great
opportunity to introduce exciting
cross-overs targeting these new
adventurous Chinese consumers.
Key Franchise Points
* Only around 13% of American franchises have entered the
Chinese market.