China did not provide market- oriented economy that could follow the normal progressive pattern from the beginning of its reform and opening up. This market was not only influenced by the traditions, politics and ideology of China. The great gap between China and developed countries led to the much different competitive situations.
　　For the long term, it might not be a bad thing. But this could cause chaos in the market for the short term, which could confuse the market players. They might find their strategies could not work as expected. For those foreigners, this might be more confusing. However, some of them are smart enough to make use of the chaos to achieve success in this country.
　　The fast food industry is also crawling with the chaos. The two most known fast food giants KFC and McDonald’s are typical enterprises that achieved success in China like this.
　　 Expensive Foreign Fast Food
　　The age of fast food started when McDonald brothers reduced the number of their drive thru’s products from a dozen to three and the price of each hamburger from 30 cents to 15 cents in 1949. They also established the feature for the fast food industry – low price and big sales volume. By now, 13% of the Top 20 catering companies in the US are running fast food chain restaurants.
　　However, when the US fast food got into China, its original features were changed. Now, the deformed features still exist and even grow thanks to the vague recognition of fast food in China and the lack of competition. The deformations are: a), the distorted price positioning, and b), the current pattern of “achieving success” that is hard to be copied and cannot bring about the development of entire fast food industry.
　　The distorted price positioning refers to the fact that hamburgers sold in the restaurants of KFC and McDonald’s in China is dearer than in the US. The Table 1 lists a group of data.
　　From Table 1 we can see that people in Shanghai, one of the most developed cities in China, now could earn less than one third of Americans. But the McDonald’s cheese burger sold in China is 1.3 yuan higher than in the US. That means Chinese have to spend a larger proportion of their salary having a cheese burger than Americans even though they earn much less than Americans.
　　Such a situation could explain KFC and McDonald’s prosperity in China, which contributed half of the profits of Yum! Brands – parent company of KFC– in 2010 and 2011. But their prosperity cannot be called a glorious victory because they earned it accidentally in a chaotic period. If someone is blinded by the two companies’ success and tries to understand or borrow their patterns, they could be doomed. That’s why other foreign fast food brands are not as prosperous as these two. In comparison, they successfully rose ten years after McDonald’s success in the US.
　　A successful business pattern can bring about the rise of a whole industry. But in China’s fast food industry, KFC and McDonald’s are exceptions and their successful experiences are not exemplary.
　　 Rise of Local Fast Food
　　Chinese people are good at imitating. In the fast food industry, this ability generated the rise of local foreignstyle fast food. In the past ten years, numerous local fast food brands – some could not even be called brands – rose and vanished in China. They shared the same features: simple imitation, development in lesser cities, small stores and low prices. The big brands even own thousands of stores in China. Those things are easier to see in South China, where McDonald’s and KFC have better developed. However, this pattern based on simple imitation is greatly tainted by the lack of substantial core competitive power and innovation. This led to the predicament that fried chicken wings and hamburgers take half of the fast food market in China. The categories of fast food are smaller than in the US, and ironically, the largest Chinese-style fast food brand found itself in the US instead of China.
　　The similar situation could be seen in the entire catering industry. The problem fast food industry encountered in China is just like the one haunting the dairy industry. The natural and commercial environment in China does not suit milk products, but from the 1980s, Chinese government began to put great efforts into promoting the milk, causing the recession of soy milk from the firsttier markets even though it is as nutritious as and much cheaper than the milk and has hundreds of years’ history in China.
　　Similarly, foreign-style fast food does not suit China as well. The problem is not related with its flavor, but its price. Fast food chain has proven to be able to change the cuisine habit if the pattern could work. That’s why the largest Chinese-style fast good chain restaurant is in the US even though the Chinese only account for less than 1% of this country’s total population.
　　However, if the root of the fast food business pattern is changed, say, the fast food derails from the features of low price and big volume, it is no longer a modern fast food patter, but an aberrance. However, in today’s Chinese fast food market, the aberration even becomes the mainstream pattern.
　　 Pattern-less Chinese Fast Food Industry
　　The fast food industry was established by far-sighted entrepreneurs 60 years ago. Its pattern follows a simple theory – attaching importance to research, development and details. It is very easy to be copied and could benefit the whole catering industry and suppliers. But in China, the catering industry, especially the fast food industry, does not have highlighted and duplicable patterns. The vendors are still playing the main role in China’s fast food market.
　　Every year, the Chinese Association of Catering writes in its annual report that the Chinese catering industry is haunted by low quality and absence of innovation and creation. This is a problem not only for the catering industry, but also for China.
　　China’s catering industry follows an extremely conventional pattern. Investors pay attention to the performance of a single store instead of creating a duplicable chain business pattern that can sustain the development for years. For example, Xiangeqing, and Haidilao are among Top 20 catering enterprises in China. But they earn this position with only dozens of stores. Indeed, the performance of each of their stores does not pale in front of high-end restaurants in developed countries. However, they cannot expand their size like KFC and McDonald’s because of their specialty. In addition, they have no admirable technologies and management and only achieve success based on traditional flavor and excellent services. Their success is of no use for the development of the whole catering industry.
　　Investment is a problem too. The capital market in China is much more precocious than catering industry. Investors cannot find suitable targets from the catering industry and are not willing to invest into them. Compared with the hundreds of listed brands of food and drinks in the US, the catering industry in China is too young when it comes to the capital.
　　Actually, the establishment of the pattern is very simple. The US fast food industry has already gone through more than half a century’s development and established several patterns proven to be effective. The players in Chinese fast food industry need to get the knowhow of American fast food industry and change the current pattern of simple imitation. With the combination of development, management and capital, they can provide products suitable for the Chinese market and indeed boost the development of fast food industry in China.