Is China the next big thing for Asia's fast food giants?
Waning consumer demand isn't dampening operators' appetites.
When it comes to growth prospects for fast food operators, China may be where it's at.
According to Jumbo's Q2 profits announcement, the company has successfully captured China's palate. Jumbo cited that its two outlets in Shanghai were the main culprits behind the the group's surge in earnings, as profits for 2Q16 doubled versus the same period in 2015.
On top of this, the group still has its eyes set on further expansion.
"Besides a strong performance from our portfolio restaurants in Singapore, our two recently-opened restaurants in Shanghai have also provided a boost to the Group’s performance. Looking ahead, the Group’s overseas operations are expected to grow and contribute positively to the Group," stated Ang Kiam Meng, Jumbo Group's CEO and Executive Chairman.
Meanwhile, Catalist-listed Japan Foods saw closures in all its markets except China. According to its 1QFY17 earnings report, its overseas network tapered to 19 restaurants. It shuttered three of its Ajisen Ramen restaurants in Malaysia and Vietnam, and ceased operations of two Menya Musashi restaurants in Hong Kong.
Japan Foods further stated that it will "continue its efforts to seek opportunities to expand its presence in the ASEAN region by way of joint ventures, acquisitions and/or sub-franchising of its brands."
Conversely, Jollibee Foods Corporation (JFC) was stung by weaker sales in China. In its latest quarterly report, JFC noted that its China sales tumbled 5.7% in Q2 on back of tight competition faced by its Yonghe King brand. Despite this, JFC remained upbeat on its China prospects.
“We look forward to a strong recovery of our Yonghe King business in the months ahead with the launch of new products with high value and taste scores supported by strong marketing campaigns and continuously building a significant business in the People’s Republic of China and other parts of the world," stated JFC CEO Ernesto Tanmantiong.
