Yum China 4Q16 Earnings Call Notes

Micky Pant

7500 restaurants in China

“Over the past three decades and you can see on slide seven, we have built an unrivaled national presence and today we have over 7,500 restaurants across 1,100 cities in China. There are more KFCs in China than in any country in the world, including the United States.”

Rapid adoption of digital impacting dining experience

“In China today, the rapid adoption of digital technology by consumers is impacting many aspects of the dining experience, from store and menu selection, to payment and feedback. Digital technology is transforming every step of the customer journey and we’re taking steps to make this a competitive advantage to drive sales.”

Not a single country where digital adoption higher than China

“I have not, from the experience around the world, seen a single country where the adoption of digital technology is at a higher level than China. It’s extraordinary how people’s lives revolve around digital technology. And particularly impressive is the transition of almost over two years from zero credit card or anything other than cash to suddenly, in some stores, cashless payment being a majority of our sales. So I think that this rapid increase has been two factors, one is the adoption by technology by customers in general, outstanding technology partnerships like WeChat Pay or AliPay and we have been their lead partners in expanding it. I’m very optimistic that that number will continue to grow. And then of course, it’s being driven on the back of all the great work that Joey and the team have done on digital marketing in general which links the customer experience with the ability to pay. But you go to stores in China now and regularly, you will see people paying with their cell phones in a variety of retail formats. So we expect that to continue to grow and we’re encouraged by it.”