Doing business in China: Employees, Training, and Cultural Roadblocks

The McDonald’s website says that the company spends more than 1 billion dollars annually for training. which is a lot more than many of us would ever suspect that they spend. How many times have you gone through a McDonald’s drive thru and driven away wondering if what you ordered is actually what’s in the bag they handed to you? Or maybe you do what I do, open the bag and look inside to make sure it’s all there, before I drive all the way home and find out that part of my order is missing.

I was watching a McDonald’s documentary on tv the other night that talked about how McDonald’s is spreading it’s McSales strategy in China. It seems that they are having problems with drive thrus in China too, although the people of China have figured out a way to make sure their order is correct before they drive all the way home.

McDonald’s quickly realized that they would need to train their drive thru customers in China. Instead of picking up their food at the pickup window and driving to their destination, their Chinese customers were parking their cars and going inside the restaurant to eat it. I kid you not. The documentary showed a McDonald’s employee at the drive thru window actually waving at a customer who was sitting in their car waiting by the ordering speaker. The employee had to signal with her hand for them to drive forward, then she instructed them to drive away from the pick up window. I’m willing to bet that McDonald’s tv commercials in China are being used to show customers the proper way to use a drive thru window. 

The other problem that McDonald’s is having in China is convincing them that a burger and fries is a meal that they should eat. Overcoming thousands of years of traditional Chinese food is undoubtedly not an easy feat for Ronald McDonald or anyone else to accomplish.  The typical McDonald’s “meal deal” of a burger, fries, and an icy cold Coke, may be a bit of a hurdle to overcome in a culture whose beliefs are not like those of Westerners. For example, Chinese culture teaches that cold drinks harm the body’s digestion of hot foods. They also believe that eating chicken or fish without its head or tail is considered bad luck. Yet, Americans love Chinese food and buy it all the time here in the states. However, the Chinese food that we buy is not quite like the traditional food they eat in China. They eat stuff in China that I’ve NEVER craved.

KFC otherwise known as Kentucky Fried Chicken actually outnumbers McDonald’s restaurants in China. KFC began setting up shop, according to the documentary, long before Ronald and MickeyD’s came in to town. I wonder if it’s because KFC’s fried chicken has a look and shape that looks more familiar to China’s citizens? 

Undoubtedly KFC, McDonald’s, and Pizza Hut are looking at the enormous financial gains they can make by getting China’s population of 1.3 billion people hooked on their fast food fare, but setting up shop in China isn’t as easy as putting up a new restaurant here in America. They have to convince China’s population that what they sell is better than what their families have been enjoying for generations and they have to deal with the regulations of the Chinese government. In April, the Chinese government accused McDonald’ of underpaying part time workers there. The companies say that they are paying fair wages, which has been reported as being somewhere in the range of 52 cents to 97 cents per hour. Chinese officials also accused the American companies of making part-time workers work full-time but refusing to give them the benefits of a full-time employee. The American companies denied the allegations and say they are cooperating fully with any investigation of their labor practices. However, in August 2007, Forbes reported that McDonald’s agreed to raise the wages of it’s 47,000 plus employees who are working in their 800 China based restaurants.

But, McDonald’s managers are innovative thinkers and I’m sure they’ll find a way to deal with all of the hurdles they have to overcome in China. They may even want to follow this McDonald’s franchiser, as cars continue to gain popularity as a means of transportation in China. We think we’ve got a shortage of fuel in the world now. We ain’t seen nothing yet. Just wait until China starts to look like the driveways across America that have a minimum of two cars parked in them. Any one want to do the math on that? But, if you happen to be visiting China this year, you will be able to drive a car there now, which you couldn’t do before. Foreigners were not allowed to drive a car in China before 2007 without a Chinese driver’s license. Foreigners may not get a temporary license to drive there but you can’t “rent a driver”. They don’t feel that foreign driver’s licenses provide them with enough proof that a foreigner is a capable driver. Maybe they saw the Pew Research report stats that reveals what American drivers say they do, while they’re driving.

• More than two-thirds (68%) of drivers say they have sung aloud while driving.
• Roughly six-in-ten (58%) have talked on a handheld phone while driving.
• More than four-in-ten (41%) have eaten a meal while driving.
• One-in-six (16%) have combed their hair or applied makeup while driving.
• Some 6% have read a paper, book or magazine while driving.
• Some 6% have fallen asleep while driving.
• And 38% have cursed at another driver.
  

Yet, China exports products around the world whose safety features have been questioned by America and other countries who import China’s products. But, as cars become more and more common in China, I’m sure they’ll be experiencing the same kind of driver behavior we have in America. And I expect they’ll have the same kind of  traffic accident reports that we do, but unfortunately on a much larger scale.  Oh well, it seems to be the price we all pay for living and working in a global economy.

Comments

[Larry Ossei-Mensah]

Interesting points that you have raised. Besides creating a paradigm shift in the minds of Chinese consumer that fast food is good, what else do you believe MNCs like KFC, McDonalds, and Starbucks (a nation of mostly teas drinkers)should do to have success in China? Moreover, do you think these companies are doing a good job of targeting the "new middle class" in China? 2 income families with less time to eat cook meals.... Thoughts?

[Gina O'Leary, General Manager]

Hi Larry. Thanks for your comment. I think the most important thing that American companies operating in other countries need to do is "go to the source". Ask the people who live there what they like or don't like about your products and services. Then take the steps necessary to meet their wants and needs.

Introduce them to foods that are foreign to them and expect that they will probably react like a child who is a picky eater. The adventurous eaters will try it and "some" of them will like it. Some won't. How do you entice a picky eater child to try a new food? Use that strategy with China's customers. And most importantly, ask their opinion of it!

Targeting the middle class in China, I suspect will be much like it's done here in the U.S. too. They will target the kids, who will nag their parents, who will bring them to the new American restaurant. The one with the free toys, the one they saw advertised on TV. the one their friend(s) have already been to! I also think that the Chinese middle class will embrace "fast food" for exactly the reasons you mentioned.. less time to cook and eat meals. Like American parents, I suspect it will be easier for middle class Chinese parents to bring their kids to the places they ask to go to, than it will be to listen to them whining about why they can't go!

Although China has an ancient culture, I think it will transform in to a youth driven economy and culture, much like we have here in America. Unfortunately, I think that the price of progress for China will be that they will lose some of their wonderful traditions. The elders won't like the change and the youth there will think that the elders don't have a clue about what's cool. But what the kids think about the products or services offered by American companies is worth paying attention to. Kids spend millions of dollars on the things they think are "cool" in America. I think that kids in China will be much like American kids in that respect. So, if I were trying to sell a product in China, I'd get the kids to think it was cool! Once a business overcomes that hurdle, it's money in the bank!