Taiwan Today

Usually in June, the summer's heat begins to bake Taipei. It is a time for eve­nings out, for strolling…for the new fast food restaurants, both Chinese and Western. This June is, indeed, welcom­ing the advent of a number of additional fast food chains to the city.

For following closely in the footsteps of McDonald's, Kentucky Fried Chicken's good-lickin' fingers have done some walkin'—clear across the Pacific. Colonel Sanders began smiling at Hsimenting (downtown) patrons on April 16. In mid-June, the second outlet for the chain will open on Nanking East Road in the financial district.

Wendy's juicy concoctions will offer an alternative for hamburger fanciers (in June) on Chunghsiao East Road, the first of six restaurants planned for opening this year.

Mister Donut, founded in 1955 in the United States, has since rolled to more than 1,500 outlets around the world, among them two quietly opened here in February this year. The proprie­tors promise a grand opening in June when the third comes on line.

And Dunkin Donut, a competitive newcomer, plans to start business at Hsimenting in June after a long preparation.

Every new arrival, trump card in hand, is filled with confidence about its prospects in this brand new market:

—Kentucky Fried Chicken stresses market surveys that indicate the crunchy delights of fried chicken are the most welcome of all fast food experiences in Taiwan.

—Both Mister Donut and Dunkin Donut note that their product is a "single item but plurally varied"—altogether, more than 200 tastes and varieties in donuts in the United States. In Taiwan, it will offer at least 60 fresh varieties each day, according to a Mister Donut spokesman.

—Wendy's notes not only its dif­ferential product, but "the atmosphere of a luxury restaurant without pressure to finish and leave quickly," according to Taiwan coordinator Marty Oyeu.

Facing the oncoming challenge with apparent equanimity, McDonald's, the international giant and Taiwan pioneer, is (Mc)ing its way forward with full confidence. In late May, the seventh golden arch rose in sight of the Taipei railway station, and six more are sched­uled to do landmark duty here before the end of this year.

In addition to the American fast food chains, Japanese flavored biandang (box-meal) stores are bursting into the Taipei market. Domestic entrepreneurs, confronting the influx, are also striving to develop Chinese-style fast food operations.

McDonald's conquest of Taiwan began with its first triumph in the spring of 1984. The new outlet here racked up top turnover in the world at NT$1.2 million (US$30,000) daily, mightily stirring food-interested circles at home and abroad. The mass media, as it were, ate it all up with such dramatic, eye-catching headlines as: "The McDonald's Whirl­wind," "The Successful McDonald's Invasion of Taiwan," "The McDonald's Shock."

US$30,000 turnover per day is an attractive number as against a comparatively tiny capital outlay, "Even in the United States, US$3,000 per day turnover identifies a top outlet," commented Jaunn-der Lin, watchful financial controller for Honey Donuts Co., the local parent for Dunkin Donuts,

Joseph Han, vice president of Quanta Foods, Ltd., McDonald's general agent in Taiwan, confides that Ronald McDonald relies on the middle-class rather than the young to make up those high numbers in Taiwan, contrary to the top-of-the-head assessments of a number of local newspapers.

One of the most important charac­teristics of this particular middle class is that it is pluralistic (or perhaps we may say that its is the product of a pluralistic society). In any case, its lifestyle choices are also pluralized ... including its food tastes. Local people, in general, have long sampled a traditionally varied cui­sine-Szechwan, Hunan, and Cantonese dishes, Vietnamese, Japanese, Korean, and Mongolian recipes, and so forth.

"McDonald's came here not to alter Chinese dining practices, but to offer still another choice," proclaims Han, re­sponding to the fears of some that Chinese cuisine, itself, would suffer.

The addition of fast food franchises to traditional restaurants and hotel offerings is reflective of the sharp advances in average incomes over recent years, the trend to small families, and the increased number of working wives: enough so that the new investors all agree that Taiwan has reached a golden prime for franchise fast food development.

The baby who put the Taiwan area's population over the 19 million mark in January this year joined in a per capita GNP that rose to US$3,000. Over the next five years, according to government estimates, that number will double. The linked (and conservative) estimate of Taiwan's "eating-out" industry now exceeds US$2.5 billion per year.

If "fast foods" is taken to mean that customers can have their food after a brief waiting time, or that the food is ready to serve after a simple heating procedure, then there was never actually a shortage of local fast food eateries.

But, in reality, the modern concept adds volume production, with facilities, service, and product all of consistent quality. In other words, at any time, at any franchised outlet, customers can get the same flavor and quality in their food in a consistent environment.

Before the coming of McDonald's, few domestic restaurants were very aware of this concept-tight enterprise management to control costs and assure product quality and service. Usually, the boss just groped his way via trial and error.

Now the administrative restaurant trade, like any other business, is moving increasingly to systematic management: personnel training, cost control, budget planning, cash management, etc. And this can only nourish business everywhere.

Detailed surveys of this market preceded the location of the fast food franchises here. Daniel Lee, the assistant manager of Continental Foods Corp., Mister Donut's Taiwan agent, confided that Mister Donut began a market survey and registered its brand in Taiwan some ten years ago.

And well before Wendy's decided to open here, a thorough "food traffic formula" was processed. "For example, what is a prospective site's traffic and passenger volume per hour; what is the range of the target residents' income; what's the major activity in the area—an office area ... a housing district?" offered Marty Oyeu of Wendico Taiwan Limited, general agent for Wendy's International.

Employment of chipper, part-time student-workers is also a characteristic of the new fast food operations. Wen Chao-tung, manager of the Skylark Family Restaurants, a Japanese concept, noted that Skylark does not desire expe­rienced service personnel, because it feels it is more difficult to get rid of their bad habits than to train new people.

The introduction of foreign food en­terprise concepts on local enterprises is, even at this early date, becoming very evident.

Chi Chi Chiao Fu, one of the front­-running Chinese fast food chains, is a new section of Mercuries & Associates, noted for merchandise and gift chain stores.

In July 1983, M&A's first quartet of fast restaurants was opened, then later supplanted (after a ten month trial) "be­ cause the offered variety was too complex." In May 1984, Chi Chi Chiao Fu replaced the original four with a concept involving only three basic items—varieties of beef, noodles, and rice dishes. Its seventh outlet opened this April.

Restaurant administration expert Ma Der-sing took Chi Chi Chiao Fu as an example to analyze the developing ex­perimentation in Chinese fast food restaurants. He noted that M&A's first trial violated the rule that the menu of a fast food store must be limited. A problem of Chi Chi Chiao Fu now, he said, is that its active business hours can not be pm­ longed—a serious matter since the unit time per customer is too long for noodles and soup, Since the price of these fast food items is comparatively low, a fast turnover of seats is essential.

Hsu Kuo-an, director of the Industri­al Development Bureau, notes that a main benefit the government expects from the proliferation of foreign food operations here is the effect in elevating domestic food industry operations.

Mister Donut's Daniel Lee pointed to already visible effects: "One year ago, people might ask why you need college students to sell donuts. Now, people seldom raise that question. That is to say, people here have a new idea of the food trade right now."

At the beginning, of course, people's curiosity and the desire to try new flavors lead them to the new restaurants; later, when curiosity is satisfied, those who really serve their customers best will come out on top. Domestic or foreign dishes, the choice will be up to the Chi­nese people. The final beneficiaries will be the customers.