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McDonald's and KFC are taking mobile technology to China

Fast food chains that take their franchising operations abroad face a lot of complicated issues. The trends happening close to corporate headquarters do...

Frazer Jones
|Jul 8|magazine9 min read

Fast food chains that take their franchising operations abroad face a lot of complicated issues. The trends happening close to corporate headquarters don’t always matter in these new markets. Finding success here rests upon meeting the trends—and dodging the challenges—inherent to each unique region.

McDonald’s and KFC are two fast food chains that know this all too well. Both suffered critical blows to their reputations and profits last year after Shanghai Husi Food Co., a meat supplier to both chains’ China locations, was shut down over evidence of serious food safety violations.

Both McDonald’s and KFC are still feeling the sting of that scandal a year later, and the aftermath has left the businesses searching for new ways to connect with consumers in China and earn back trust.

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One compelling way to do this is by harnessing the power of technology to improve convenience for consumers. McDonald’s and KFC are each taking this route and introducing new high-tech options like mobile ordering and mobile pay, already finding success in the United States, in their China franchise markets as well.

According to the Wall Street Journal, McDonald’s will start testing both mobile ordering and mobile payment at its China locations within its current third quarter using an independent pilot program; meanwhile Yum! Brands has confirmed that since late June its subsidiary KFC began working with China-based e-commerce titan Alibaba Group to facilitate mobile ordering and mobile payment through mobile app Alipay, which will start rolling out at 700 of its 4,500 China KFC locations.

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The likely hope of both chains is that this boost in convenience will be a selling point and will help them appeal to consumers, especially younger trendsetting consumers who are most concerned with perks like mobile pay compatibility. Even better, it’s a selling point and a way to connect with consumers that doesn’t hinge on the food itself—considering the food safety scandals that the brands have faced in China over the past year, it could actually be a smart plan (even for a restaurant) to focus on peripheral brand benefits in addition to their products.

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The only real potential risk with introducing new concepts like this is that they must be executed well. Too many technical difficulties right out of the gate, like connectivity issues and consumers having trouble utilizing the mobile pay service, could be a turnoff and lead to consumers quickly abandoning the concept even before the franchises have a chance to fix the issues. Some technical hiccups can be expected in any new endeavor, but overall they must run relatively smoothly from the start to have a chance of success.

But as long as apps and mobile pay options are rolled out methodically and only when they’re absolutely ready, with this risk kept well in mind, the technology could go a long way toward McDonald’s and KFC boosting sales and restoring their reputations in the China consumer market.

 [SOURCE: Time]