KFC - 'a foreign brand with Chinese characteristics'

One of the many mysteries of modern marketing is how KFC, a once rather lack-luster American fast food brand, outperformed all competitors and in particular arch rival and world market leader McDonald's, to become the biggest restaurant chain in China.

Whether measured by number of restaurants, revenue, or market share, KFC is far and away the number one restaurant brand in China. Even more striking is its dominance over McDonald's, a position that is reversed in nearly every other country. McDonald's has 800 branches in China, compared to KFC's 2200 and, with KFC opening 300 new branches per year, the gap is widening.

KFC China is not just outperforming the competition. In 2007 it contributed more than 20 percent of global revenue of parent company Yum!, whose brand portfolio includes Taco Bell and Pizza Hut. It is a proportion that is likely to grow up to and beyond 50 percent, according to Taiwan-born Warren Liu, a former member of the company's Greater China executive committee.