According to a report by China Daily on February 24…
SHANGHAI — China’s fast-food sector is undergoing rapid expansion, driven by international chains like McDonald’s and Yum China, offering compelling insights for investors monitoring consumption trends and consumer-driven growth.
Market Expansion and Store Growth
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McDonald’s China currently operates over 7,740 restaurants, covering all provinces, with plans to reach 10,000 outlets by 2028. The company added 1,000 new restaurants in 2025 and aims for another 1,000 this year.
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Yum China, operating KFC, Pizza Hut, Kpro, and Lavazza coffee chains, had 18,101 stores by the end of 2025, with multibrand and diversified formats supporting long-term expansion to over 30,000 stores by 2030.
Both companies are leveraging aggressive same-store sales growth and new restaurant openings to capture market share. McDonald’s reported a 4.6% comparable sales increase in China for 2025, while Yum China’s system-wide sales grew 7%, with operating profit up 25% in Q4.
Delivery as a Growth Driver
A key structural change in the market is the rapid expansion of delivery services:
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Yum China’s delivery business grew 25% year-on-year, now accounting for 48% of restaurant revenue, up from 39% in 2024.
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KFC and Pizza Hut brands both posted double-digit delivery growth, reflecting heightened consumer reliance on digital ordering platforms.
Surveys by the China Chain Store and Franchise Association indicate that nearly half of chain catering enterprises rely heavily on delivery, with 17% seeing over 50% of orders delivered, highlighting both growth opportunity and potential operational risk if dine-in services are displaced.
Innovation in Store Formats and Branding
Yum China’s strategic expansion into healthier and specialized formats is delivering results:
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Kpro (fast-casual, healthier offerings) reached 200 stores in 2025, aiming to double in 2026
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Kcoffee expanded to 2,200 stores
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Lavazza coffee grew to 146 locations, up from 112 the previous year
These multi-format approaches enhance consumer engagement, diversify revenue streams, and strengthen resilience amid evolving consumer preferences.
Investment Takeaways
For global investors evaluating China’s consumption sector:
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Structural Growth Opportunity – China’s urban middle class continues to drive fast-food consumption, with delivery and new formats accelerating expansion.
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International Brand Leverage – McDonald’s and Yum China demonstrate that global operators can capture scale and brand recognition in a growing market.
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Digital Adoption – Delivery platforms represent both revenue growth and efficiency gains, providing insight into broader consumption digitization trends.
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Long-Term Portfolio Potential – With over 30,000 stores projected by 2030, chains with diversified brands and digital capabilities offer exposure to sustainable consumption growth.
Bottom Line:
China’s quick-service restaurant sector illustrates how consumer demand, digital transformation, and foreign brand expansion intersect to create long-term growth opportunities. International investors can leverage these trends to gain exposure to China’s evolving consumption landscape, where delivery innovation and multi-format strategies are shaping the next phase of market expansion.