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Home / Business / Q and A with CEO

Catering to consumers' evolving preferences

By He Wei in Shanghai | China Daily | Updated: 2018-04-13 10:27
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Joey Wat, CEO of Yum China. [Photo provided to China Daily]

Editor's Note: This year marks the 40th anniversary of China's reform and opening-up. China Daily interviewed top executives of well-known multinational companies for their views on the country's socioeconomic development.

Yum China says its future lies in better, faster restaurant and delivery services

Please use three words to describe China's changes in the past 40 years.

Visionary:

The success of China's economic reforms and opening-up policy would not have been possible without a drive and ambition to succeed. Yum China's evolution from a single KFC store in Qianmen, Beijing, 30 years ago, to over 7,900 stores across the country today epitomizes China's story of sustained and successful economic growth since the implementation of the flagship reform and opening-up policy over 40 years ago.

Opportunity:

The opening-up has fueled foreign investment and encouraged international companies to enter the market, bringing new opportunities and experiences to people across the country. We are proud we have been able to contribute to and play a part in leading industry standards and practices.

Innovative:

China has always actively invested in technological advancement and innovation to bolster macroeconomic growth and improve people's lives. Since opening up 40 years ago, China has transformed into a country that is at the forefront of various technological advances, such as cashless mobile payments.

What are the biggest achievements in China since the introduction of the reform and opening-up policy 40 years ago?

No other country in the world apart from China has lifted so many people out of poverty in just 40 years, which is a truly remarkable feat considering the size of China's population. Chinese people are ambitious and have an incredible drive to persevere and succeed. This strong attitude has played a big part in the success of China and will continue to do so. For Yum China, we have experienced great growth and success over the last 30 years led by strong leaders but even stronger employees who serve our customers every day.

What's the biggest challenge China faces today and how can the country overcome it?

While China has seen income levels rise and the rapid urbanization of regions across the country, the environment and poverty in rural areas have become challenges. Rebalancing and putting in place new measures have already been prioritized by the government, illustrated by President Xi Jinping's focus on improving the environment and plans to completely eradicate rural poverty by 2020.

As a company, we also believe we have a role to play in overcoming these challenges and improving the lives of the communities in which we operate. For example, Yum China has implemented a series of signature corporate social responsibility programs designed to complement the government's poverty alleviation goals and priorities, including the One Yuan Donation Program, which encourages consumers to donate one yuan to help children living in impoverished areas across China gain access to nutritional meals.

Has competition intensified between your company and Chinese companies?

I believe the key to success is to ensure that we keep up with the ever-changing demands of our consumers, as well as giving the autonomy to our local staff and fully respect regional differences inside China. One of the reasons for our success in China has been our ability to rapidly adapt to changing preferences and introduce localized offerings that increase choice and deliver local tastes and flavors. We keep our core products and introduce innovative new offerings with local flavors at different times of the year.

How do you view China's role in the world today?

China has a leading role in a number of areas in the world today. As an economy that is becoming more globalized, China is slated to play an even more crucial role in tackling many of the challenges confronting the global community today such as climate change and the eradication of extreme poverty.

Another area that stands out for me is technology and innovation. It is incredible to see the rate of adoption and development when it comes to technology in China today. It has transformed the landscape and forced companies to adopt quickly to engage with customers. But you must be able to understand how best to use all this technology. Yum China has been quick to adopt and, as always, listen to customers. One example is how we led the way in food delivery in China with the introduction of Pizza Hut Home Delivery in 2001. Delivery now accounts for over 14 percent of our business. There is the power of our membership platform and the fact that almost 60 percent of sales were cashless by the end of 2017 from 100 percent cash in mid-2015. That just shows how quickly things can and do change in China and I believe this momentum will continue.

Could China's experience and practices be used to solve global problems?

China has always been clear in what it is focused on and encouraged companies to help. I strongly believe companies have an important role to play in partnering and helping to improve people's lives. Yum China has created and implemented a series of signature corporate social responsibility programs to help with the government's poverty alleviation goals and priorities. Programs that are scalable and accessible to as many people as possible can make a real impact.

What measures do you expect if China wants to deepen reforms?

I believe that the Party and the government will continue to play an essential role to further deepen government reforms. The government has also always been a strong advocate of innovation and technology, and I believe that this support will be further strengthened in the coming years.

What will be the country's "calling card" in the future?

For the past 40 years, China has focused predominantly on driving "hard" infrastructural initiatives such as constructing railways, mega airports and bridges. In many ways, this ambition to develop sophisticated "hard" infrastructure became China's "calling card".

I believe that in the coming years, China's calling card will shift to "softer" endeavors, such as investing in business leaders, scientists and innovation. Technology will also continue to play a key role as people increasingly rely on their mobile phones in their everyday lives, ranging from paying electricity bills to applying for loans.

At Yum China, we will also continue to actively invest in our technological and digital capabilities to cater to consumers' evolving preferences and deliver better, more streamlined restaurant and delivery services, which we already offer through the KFC China Super App, enabling customers to locate a nearby KFC store and pre-order food before picking up the completed order. I believe we will see much more of this kind of customer-led, service-oriented innovation coming out of China in the next phase of the country's growth.

CV

Name: Joey Wat

Age: 46

Career:

March 2018-now: CEO of Yum China

Feb 2017-Feb 2018: President& Chief Operating Officer of Yum China

Aug 2015-Feb 2017: CEO of KFC China

Sept 2014-Aug 2015: President of KFC China

Before joining Yum China in 2014: Managing director of Watson UK

Education:

Bachelor's degree from Hong Kong University

MBA from Northwestern University's Kellogg School of Management

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