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Expansion of Japanese beef bowl chains to drive Chinese meat consumption

By Mark Godfrey , 17-Jan-2017

126 branches under the Sukika brand will be opened in 2017
126 branches under the Sukika brand will be opened in 2017

Two of Japan’s biggest conglomerates are planning huge expansion of their ‘beef bowl’ fast food chains across China in order to compensate for low growth in a saturated Japanese marketplace. 

Food conglomerate Zensho Holdings Co is looking to repeat the success of Yoshinoya, a Japanese chain with outlets across China that serve Asian-style convenience food, such as bowls of fatty beef and sliced chicken served with rice.

Zensho plans 126 openings in China through 2017, with outlets trading under the ‘Shi Qi Jia’ fascia (the firm operates in Japan under the Sukika brand). Yoshinoya – known in Mandarin as ‘Ji Ye Jia’ – meanwhile plans 103 new store openings in China in the same time frame, with 52 of those to come in financial year 2016, which finishes at the end of February 2017. In that same time frame, Zensho plans to have opened 77 outlets in mainland China as well as another 13 in Taiwan. The increased pace of Yoshinoya’s new openings is particularly apparent: the firm only opened three new outlets in China in its 2015 accounting year.

Having long set up shop in downtown locations like malls, Yoshinoya this month opened three outlets in previously unfashionable outlying regions of Beijing: Fengtai, Huairou and Changping, all of which have become sleeper towns for city commuters.

Both restaurant chains are described in the Chinese press and marketing material as “beef fast food” chains. In Japan the term used is gyūdon or ‘beef bowl’ restaurants. As observed by this writer at several Yoshinoya outlets in Beijing, consumers like the firm’s trademark streaky strips of fatty meat served atop a bowl of rice with vegetables (pre-boiled and reheated in-store) served on the side. Chicken is also served with rice and vegetables.

Yoshinoya has long used imports of fatty US beef for its beef bowls in Japan, but while it doesn’t disclose its Chinese suppliers one local company that claims to supply the firm in China is Tianjin Da Yuan Beef Co.

Aside from menu offerings, Zensho’s outlets in China will use décor to draw younger consumers from larger competitors like KFC and McDonald’s: the firm will decorate in Japanese cartoon art, which is popular in China.

While longer in China, Yoshinoya is likewise clearly going for the younger market with its newer stores. A flagship outlet, which opened this June in the southern city of Foshan in relatively affluent Guangdong province, features charging stations for smartphones, as well as free wifi.

China isn’t the only target for expansion by the two firms, with the populous and relatively high-growth economies of south-east Asia a big draw. Yoshinoya is opening 20 stores in the region’s most populous nation, Indonesia, in the 2016 accounting period up to the end of next month. Zensho is opening eight stores in Indonesia as well as one outlet in Vietnam in that same time period.

While it competes with home-grown beef noodle restaurant chains in China, Yoshinoya has sought to set itself apart via a partnership with the US-based Dairy Queen chain, to open counters for the American firm attached to its own outlets in China.

Its huge, quickly urbanising population makes China attractive for fast food firms from Japan, where economic and population stagnation has forced its businesses to seek markets overseas. The relative weakness of Japan’s currency relative to the Chinese yuan in recent years has seen a surge in Chinese tourism to cities like Tokyo, further familiarising Chinese consumers with Japanese brands and food.

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