Yum China buys majority stake in delivery firm Daojia
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Yum China Holdings said this week it has purchased a controlling stake in Daojia, a food delivery firm, in a bid to improve the restaurateur’s outgoing food business.
The operator of US chains Pizza Hut and KFC in China, Yum China has been in talks with Daojia since November, where it was reported by Reuters that the fast-food giant was willing to buy Daojia for up to $200 million.
Terms of the deal to buy the majority stake in the holding company of DAOJIA.com.cn were not disclosed, though details will be finalised by the close of May.
Yum China, with over 7,663 restaurants in China, currently offers home-delivery from more than 4,400 of its outlets.
Commenting of the majority stake purchase, Yum China Chief Executive Micky Pant said delivery is one of the firm’s main future drivers of growth for the brand in China.
“Digital and delivery are long-term strategic drivers of our business, and I am pleased to build on our technological know-how and capabilities in this high growth area,” said Pant in a statement.
The company added that in the first-quarter, delivery sales accounted for 12% of total sales.
Daojia, founded in 2010, is an online food delivery service provider focusing on orders in large cities including Beijing, Shanghai, Guangzhou and Shenzhen.
Yum China is a licensee of Yum Brands and has exclusive rights to KFC, Pizza Hut and Taco Bell. Yum China also owns the Little Sheep and East Dawning restaurants.
In February, Yum China said it plans to open approximately 600 new stores annually across mainland China, in a mass rollout that will see the fast-food attempt to outpace rival restaurateurs and boost same-store sales
Questions & Answers
Q.What is the primary reason Yum China gave for purchasing a majority stake in Daojia?
What is the primary reason Yum China gave for purchasing a majority stake in Daojia?
Yum China stated that the acquisition is intended to improve its existing outgoing food business. The company sees delivery as a main future driver of growth for its brand in China, building on its technological capabilities in this high-growth area.
Q.What percentage of Yum China's total sales did delivery account for in the first quarter?
What percentage of Yum China's total sales did delivery account for in the first quarter?
In the first quarter, delivery sales represented 12% of Yum China's total sales. This figure shows the growing importance of the delivery segment to the company's overall business performance.
Q.Which specific cities does Daojia primarily focus on for its online food delivery services?
Which specific cities does Daojia primarily focus on for its online food delivery services?
Daojia is an online food delivery service provider that focuses its operations on orders in large cities. These key cities include Beijing, Shanghai, Guangzhou, and Shenzhen, serving major urban populations.
Q.What other restaurant brands does Yum China operate in addition to KFC and Pizza Hut?
What other restaurant brands does Yum China operate in addition to KFC and Pizza Hut?
Beyond operating KFC and Pizza Hut as a licensee of Yum Brands, Yum China also owns other restaurant chains. These include Little Sheep and East Dawning restaurants as part of its diverse portfolio.
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