China Antitrust authorities finally cleared the purchase of Little Sheep by YUM this week. I believe this is a big step for YUM to realize its goal of being the largest and best restaurant chain in China. It is really hard to achieve that objective without a major presence in Chinese food. YUM knows that western brands can only penetrate the market so far given local taste preferences and historical experience. I wish more US restaurant chains has this broad vision. Jollibee in the Philippines has taken a similar strategy by acquiring two fast food Chinese chains prior to even considering the development of their flagship Jollibee hamburger brand.Look for YUM to make more acquisitions in the China market over time. Chinese QSR makes the most sense followed by either Japanese or Korean cuisine. After all, that is the type of food Chinese diners prefer.
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