Recently, a news that McDonald's China changed its name exploded on the Internet.

according to the national enterprise credit information publicity system, "McDonald's (China) Co., Ltd." has been officially renamed as "Golden Arch (China) Co., Ltd.". The new enterprise name "Golden Arch" is considered by many netizens as "funny" and unwilling to accept it. More people are curious-why?

on October 26th, China of McDonald's told China Business News that after McDonald's became a strategic partner with CITIC and Carlyle, the corporate name of McDonald's China Company was changed to "Golden Arch (China) Co., Ltd." on October 2nd, 2117 due to the needs of business development.

You know, it is not easy to publish the word "Golden Arch", so McDonald's China Company delayed the publication for at least two or three months. What is more difficult is whether McDonald's, which operates independently, can give a good response to the constant changes in the catering market in China.

McDonald's China changed its surname

McDonald's China changed its name because McDonald's sold its business in China. Since the new company will no longer be a holding subsidiary of McDonald's, it will only be a franchise operator of McDonald's stores in mainland China and Hong Kong, so it is unnecessary to continue to be named "McDonald's", and it is logical to change its name.

As for some people's concern that McDonald's restaurants in mainland China will also be renamed, McDonald's China responded that the name change is mainly at the license level, and the daily business will not be affected: the McDonald's restaurant name, food safety standards and operating procedures will remain unchanged.

on March 31th last year, McDonald's announced that it would introduce strategic investors into its major Asian markets, so as to fully release the development potential of the markets and further promote the company's future development. At that time, McDonald's said that it would enhance its competitive advantage and increase resources by introducing strategic investors to realize a more localized development strategy. The increase of capital investment in the future will also promote the expansion and upgrading of restaurants.

after nearly a year of searching and negotiation, McDonald's finally reached a strategic cooperation with China CITIC Co., Ltd. (11267.HK), CITIC Capital Holdings Limited (hereinafter referred to as "CITIC Capital") and Carlyle Investment Group under China CITIC Group and established a new company. The new company will acquire McDonald's business in mainland China and Hongkong at a total consideration of up to 2.18 billion US dollars (about 13.8 billion yuan). CITIC and CITIC Capital will hold 52% of the controlling shares in the new company, while Carlyle and McDonald's will hold 28% and 21% respectively.

on August 8th this year, McDonald's (MCD.NYSE) announced that the above transaction had been completed, and the new McDonald's China Company was established on the same day. McDonald's China Company has thus become the largest franchise operator of McDonald's outside the United States, operating and managing about 2,511 McDonald's restaurants in China and about 241 McDonald's restaurants in China and Hongkong.

At the same time, McDonald's China Company has completely become a company controlled by China enterprises. Of course, the authorization still comes from McDonald's.

according to normal business logic, the name of the new company should be announced at the same time as the establishment of the new McDonald's China company.

However, at the launch conference of the new company at that time, Zhang Jiayin, CEO of McDonald's China, told the First Financial Reporter that the name of the new company had yet to be determined, so it could not be announced yet.

In fact, a careful analysis of the new name of McDonald's China Company is well-intentioned. As McDonald's China is no longer a holding subsidiary of McDonald's, but at the same time it is related to McDonald's, the name "Golden Arches" does have this effect. A scholar who is familiar with the history of McDonald's told reporters: "The original idea of McDonald's founder's Logo design is that the' golden arch' looks futuristic, has a sense of belonging, and is very conspicuous, so that people can see it at a glance."

behind McDonald's "seeking change"

McDonald's is not the only one seeking to introduce strategic investors. KFC, the "old rival" of McDonald's, also introduced strategic investors in China and went public independently, but KFC China is still controlled by KFC, so there is no need to change its name.

It's worth noting that the two foreign fast food giants both initiated the plan of introducing strategic investors at the same time, and the rapid changes in China's catering market forced foreign fast food to respond in time.

In recent years, with the rise of the post-91s young people, the consumption habits of the main consumer groups of foreign fast food have undergone tremendous changes. Both McDonald's and KFC are facing greater competitive pressure from local catering enterprises, and changes are imperative.

Li Zhi, a food industry research expert, told the First Financial Reporter: "McDonald's, KFC and other foreign fast food giants have made a lot of money in China for many years, and at the same time, they have reached a critical period of transformation. In the past, simply moving overseas models to China can no longer meet the needs of the younger generation of consumers in China. In their minds, the brand images of McDonald's and KFC are not as high as those of the older generation. They have higher demands on catering, and even a large part of them are far away from foreign fast food such as KFC and McDonald's, thinking that these are' junk food'. "

KFC doesn't agree with the word "junk food". Joey Wat, president and chief operating officer of Yum! China, the parent company of KFC in China, told the First Financial Reporter: "We believe that as long as the food sold in the normal market is not healthy or unhealthy, there are only healthy and unhealthy eating habits."

Nevertheless, the changes in consumers' eating habits exist objectively, and foreign fast food giants have begun to appropriately change their dishes to meet the needs of consumers. For example, KFC launched KPRO, a brand-new sub-brand store, with salads and sandwiches as the main dishes. In order to meet the needs of young consumers for fast life and new fashion, it also launched a face payment function.

McDonald's is not to be outdone. Considering that the younger generation of consumers pay more attention to personalization and informatization, McDonald's will also highlight the personalized and digital restaurant "Future 2.1" in its stores. Hong Kong and Shanghai will become the innovation centers of the new McDonald's, and explore the future development trend of catering by improving customer experience, innovating menu and promoting digital catering service.

All these changes require McDonald's or KFC to know more about China and make faster decisions on the ever-changing catering market. It is a good way to operate the China business independently and introduce local strategic investors. In fact, for McDonald's, the shortage of stores depends more on strategic investors in China.

Citic is in charge, pushing the expansion of stores in third-and fourth-tier cities

Compared with KFC, the number of stores in McDonald's has been hovering over 2,111 in recent years. Although McDonald's has been widely distributed in first-and second-tier cities, for the vast number of third-and fourth-tier cities, the original McDonald's China seems to be somewhat inadequate.

however, things have changed since citic took office. "CITIC Group is the largest comprehensive business company in China, with outlets all over the country, especially CITIC Bank, which has 1,411 outlets. With the sinking trend of the overall financial business, CITIC Bank has a deeper understanding of the local market in the location of third-and fourth-tier cities, and these information and resources can be shared with the new McDonald's China." When the new company was founded, Zhang Yichen, Chairman and CEO of CITIC Capital and Chairman of the Board of Directors of New McDonald's China, had previously told the First Financial Reporter that "real estate companies including Vanke, Evergrande and R&F are important partners of CITIC Group. At present, CITIC has started to introduce these companies to McDonald's, and several of them have already had substantial strategic cooperation with McDonald's."

As soon as Zhang Yichen's voice fell, McDonald's China successively cooperated with many domestic real estate giants such as Evergrande, Country Garden and China Shipping Real Estate in the past two months. For example, China Shipping Real Estate said that it will cooperate with McDonald's in commercial complexes, community businesses and office buildings in more than 61 core mainstream cities.

It is difficult to get so many hydrangeas thrown by local real estate giants in a short time without a big shareholder like CITIC. With the help of CITIC Group, Golden Arch has greater confidence in the expansion of the store.

The "Vision 2122" accelerated development plan of China Mainland released by the new McDonald's China proposes that the average annual sales growth rate will be kept at double digits in the next five years, and the speed of opening new restaurants will gradually increase from about 251 in 2117 to about 511 in 2122. By then, about 45% of McDonald's restaurants will be located in third-and fourth-tier cities.

However, in the face of the ever-changing market and the emerging Chinese fast food, the expansion pressure of the new McDonald's China is still considerable.

In this regard, Zhang Yichen thinks that western-style fast food still has advantages. "First, the entry threshold of Chinese fast food is relatively low, while western fast food has a huge industrialization foundation and accumulated technical experience for many years, which is not accessible to ordinary enterprises; Second, it is difficult to make Chinese fast food into a scale, because the overall standardization of Chinese food is poor, and it is also difficult to do. On the contrary, Western fast food has built a sound standardization foundation and is easier to expand on a large scale. "

Zhang Yichen emphasized: "Although Chinese catering accounts for 91% of the catering market, the 111% share reserved for western catering is not small, and it is not bad to occupy a few more percentage points in this huge market."

However, China food industry analyst Zhu Danpeng expressed concern to reporters: "The density of McDonald's in first-and second-tier cities is already high. It is certainly a good decision to continue to open stores in third-and fourth-tier cities in the next step, but we should also realize that a large number of young people with spending power in third-and fourth-tier cities in the central and western regions have moved to developed cities in the eastern coast, which will inevitably lead to the problems of low unit price of stores and low input and output of single stores in third-and fourth-tier cities. Therefore, the performance improvement that can be brought to McDonald's China area may not be as high as expected. "

McDonald's has also considered this problem. Zhang Wei said: "Focusing on third-and fourth-tier cities is not simply copying stores in first-tier cities to third-and fourth-tier cities. There are still some differences in store positioning. For example, McDonald's stores in first-and second-tier cities focus on breakfast and lunch for office workers; In third-and fourth-tier cities, it is more afternoon tea and snacks for leisure people on weekends and holidays. "