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Krispy Kreme Opens in China

From the Associated Press

U.S. doughnut maker Krispy Kreme began dipping into the massive Chinese-speaking market Tuesday by opening a shop in Hong Kong -- China’s richest city.

The 2,000-square-foot shop, tucked down a side street in the busy Causeway Bay shopping district, marks Krispy Kreme’s debut on Chinese soil and only its second foray into East Asia.

Winston-Salem, N.C.-based Krispy Kreme Doughnuts Inc. has nine shops in South Korea, but it is expanding aggressively in other parts of the region.

Other than Hong Kong, the company has signed franchise deals with groups in Japan, the Philippines and Indonesia, where there are plans to open stores by the end of the year. Sydney, Australia, has more than 20 stores, and a franchisee has been signed up in the Middle East.

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But perhaps one of the most salivating prospects for any multinational business is China’s 1.3-billion potential customers. Hong Kong, a hub for Chinese and Western gourmet cuisine, may be an ideal testing ground.

Although fast-food chains like Yum Brands Inc.'s KFC and McDonald’s Corp. are common in China, doughnuts are generally rare, even in Westernized Hong Kong.

Krispy Kreme Director of Marketing Jim Rogers believes the company enjoys one key advantage in the region -- its trademark open doughnut kitchen.

“I think that’s very important, typically to the Asian cultures, to see food prepared in front of you, and that’s why we think it has such great success opportunities here and in other Asian markets,” Rogers said.

The Chinese are known for their affinity for fresh foods. In Hong Kong, chicken and fish are killed on the spot in restaurants and markets. Local eateries display racks of barbecued pork and duck behind large windows in kitchens at the front of the restaurant.

There is also Krispy Kreme’s trademark fresh glazed doughnut, which unlike the conventional dry doughnut offers a sugary softness that resembles a Chinese red-bean-filled dough-like dessert.

Brian Parfitt and his younger brother, Wayne, hold the Hong Kong franchise rights; Brian Parfitt says he is considering introducing local flavors, with one possibility being the popular Chinese red bean.

The Parfitt brothers have pulled out all stops in trying to generate buzz for the shop’s Hong Kong debut, handing out free samples and hiring workers to carry a big countdown sign near the outlet.

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Legislator Tommy Cheung, who represents the restaurant industry in Hong Kong’s legislature, said locals were quick to embrace Western foods they once resisted.

“I don’t dare to offer a negative prediction,” he said.


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