Shanghai, China (March 11, 2020) – Yum China Holdings, Inc. (the “Company” or “Yum China”) (NYSE: YUMC) today announced that it has been named to Fast Company’s prestigious annual list of the World’s Most Innovative Companies for 2020. Yum China has been recognized among the top 10 most innovative companies in China, and is one of only a few restaurant holding companies in the world to be included. The list honors the businesses making the most profound impact on both industry and culture, showcasing a variety of ways to thrive in today’s fast-changing world.
The recognition illustrates the Company’s focus on food and digital innovation. According to Fast Company, Yum China “aggressively makes technological enhancements to the customer experience, and new menu items are the secret herbs and spices for its business.”
“We are honored by this prestigious recognition from Fast Company. It is a validation of our long-term vision, which is to be the world’s most innovative pioneer in the restaurant industry,” said Joey Wat, CEO of Yum China. “This award is made possible by the ongoing efforts of our employees who live and breathe our vision every single day. By harnessing the world’s largest restaurant loyalty membership program, a powerful digital ecosystem, and industry leading data and AI capabilities, we are constantly innovating to better serve our customers and achieve sustainable growth.”
“At a time of increasing global volatility, this year’s list showcases the resilience and optimism of businesses across the world. These companies are applying creativity to solve challenges within their industries and far beyond,” said Fast Company senior editor Amy Farley, who oversaw the issue with deputy editor David Lidsky.
A relentless commitment to innovation is the major force behind Yum China’s growth strategy. The Company’s powerful digital ecosystem, that integrates online platforms with offline stores, is key to enhancing customer experience and engagement throughout the customer journey. Data and AI capabilities are enabling Yum China to make more informed and improved decisions throughout the entire business, including menu innovation, delivery, marketing, store operations and supply chain management.
Powerful digital ecosystem for an immersive customer experience
At the heart of Yum China’s digital ecosystem are the KFC and Pizza Hut Super Apps. They allow the Company to engage with customers wherever they are, and extend beyond food to music, games, sports, and entertainment. Within each App are integrated individual digital features such as coupons and vouchers, privilege memberships, e-commerce, payment options and corporate social responsibility activities.
With a combined 240 million digital members at the end of 2019, membership and loyalty programs at KFC and Pizza Hut provide a wealth of valuable customer feedback and knowledge across different cities. This data helps determine the most effective and preferred store formats, store locations, and menu items. It also significantly increases the effectiveness of marketing campaigns while building awareness and loyalty quickly. Additionally, exciting offers within the Privilege Program drive frequency, value perception and customer loyalty.
Digital orders, which includes delivery, mobile orders and kiosk orders accounted for 61% of Yum China’s sales in 2019. In addition to the widely used Alipay and WeChat Pay platforms, YUMC Pay, a payment option in partnership with Union Pay, offers another convenient option for customers. Meanwhile, increased automation in stores is creating disruptive retail experiences. Self-ordering kiosks with Alipay’s “Smile-to-Pay” facial recognition payment technology can be found at over 1000 KFC stores and fully automated dessert stations are available in selected stores in five cities.
Delivery is a key growth driver for Yum China, especially as the Company continues to expand into lower-tier cities. Rolled out nationwide, Delivery 3.0 is Yum China’s intelligent trade zone focused platform that optimizes delivery services and improves efficiency. The platform’s AI driven dispatching system and logistics overflow support is transforming the relationship between customers, riders and stores.
Data driven intelligent marketing and harnessing AI to drive sales and operational efficiency
Digital marketing accounts for approximately 60% of Yum China’s marketing spend and timely data is helping the Company take a flexible yet targeted approach to marketing based on consumer preferences. For example, in 2019, Yum China rolled out AI enabled menus and recommendations for all mobile pre-orders, providing personalized customer interaction and trade-up opportunities.
Using AI based technology, Yum China has significantly improved sales forecasting, leading to better inventory management and store labor scheduling. Notably, this enhances the ability to quickly reallocate resources to new roles and growth areas. Yum China has developed tailor made algorithms that help to evaluate changing data patterns at the store level, such as location, sales performance, weather, promotions, and holidays. The Company is also rolling out smart watches that enable RGMs to closely monitor the ordering and serving status of restaurants and quickly identify and rectify any issues.
Doubling down on investment in innovation
Yum China recently reiterated its commitment to stepping up investment in innovation throughout the Company, particularly in the areas of digital, technology and supply chain. This is expected to further drive profitable innovation-led growth, increase operational flexibility and agility and ensure first class execution that consistently exceeds customer expectations.