Yum China CMO: KFC Is A Tech Company Disguised As A Fried Chicken Business

Yum China CMO: KFC Is A Tech Company Disguised As A Fried Chicken Business
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Cannes Lions is shining a spotlight on China with a curated China Day on this year’s program, backed by Tencent – one of the many Chinese brands in the sponsor lineup. In a rapid fire presentation, Yum China CMO, Steven Li, joined Chris Chen, CCO of Isobar China Group, to discuss how KFC was able to turn its stagnant business around in a mere three years.

Chen kicked off the presentation with a bold claim that KFC is now touted to be the next in line to join the big three Chinese tech giants – BAT – Baidu, Alibaba and Tencent. He explained that this was unthinkable back in April 2015, when the brand was experiencing a huge lost of shine to its “young and energetic image”.

“In China, niche is mass,” said Chen, to a chorus of chuckles in the audience. With a group of 280 million digital natives who are becoming the driving force of Chinese consumers, coined the ‘Post 95s’, digital marketing to millennials in China is done at mass scale. Even channelling ‘smaller’ apps like Kwai and Douyin, we’re still talking about DAU (daily active users) of 110 and 60 million respectively.”

But as Chen clarified, while scale is an advantage to marketers, the ageing brand needed to live in youth culture in order to not only remain influential but also to turn this hyper connected group into advocates of KFC.

So they built a KFC super app – an ecosystem where all customer interactions with the brand – order, payment, delivery, membership benefits, e-gifts – can take place. And they also did it following the four pillars of their marketing strategy:

  • Social in
  • Mobile up – all campaigns in China are mobile centric
  • Always on
  • Last mile first – keeping transaction front of mind

Li explained that his team are now tasked to work like product managers in a tech firm, as managing inventory of 5,600 stores over 1200 cities in order to deliver a mobile pre-ordering system, including delivery service to high-speed rail passengers, is a massive technical and data undertaking.

The super app has become so successful that in less than three years, KFC has built a loyalty program with more than 120 million members and app sales today accounts for 40% of all sales for KFC in China.

The second case study demonstrated KFC’s use of AI, which took on the form of Dumi – an AI service robot, developed in co-op with Baidu, which can accurately recognise regional Chinese dialects and human emotions.

KFC’s foray into AI also include a ‘pay with smile’ system in 1500 stores where customers can make a payment simply by smiling into the ordering screen; as well as AI generated menus based on customer’s past purchases and personal preference.

The session concluded with a final case study of KFC’s use of a gaming partnership. With more than 564 million mobile gamers in China, KFC was quick to jump into bed with Onmyoji – a mobile game which saw 200 million downloads within six months of launch. Using LBS (location-based service) and AR, reminiscent of Pokémon Go, players are encouraged to meet in-store to play together in order to access hidden content and rewards. Li was quick to add that parents loved this campaign, as it convinced young people to leave their house. The campaign proved to be wildly successful as 3 million Onmyoji Meal Boxes were sold out in nine days.

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Cannes Lions 2018

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