Posted: March 3rd, 2022

McDonald’s in developing countries of Russia, China, and India

McDonald’s started operations in 1990 in Russia and within a decade it had expanded by more than two dozen outlets in the country. Currently Russia has more than 70 outlets and is considered to be one of the fastest growing markets along with Western Europe and China. McDonald’s decided to accept Rubles the only currency that the Russian citizens had in order to gain wider consumer base. The Russian currency had no value outside the country and non-convertible.
The company decided to spend the rubles on buying farmland and property to set up its restaurants, office complexes, and production units for the restaurants. The company intends to make profits by selling the acquired property and the restaurants in the near future. The McDonald’s in Russia as such has become a self-sustained unit with long-term vision of expansion across the country. McDonald’s owns and operates most of the outlets in the country and plans to increase the franchisee setups in future.
The fast food market in the country is growing at 20% annually as per studies. McDonald’s is one of the leading fast food chains in the country with a growing brand recognition and loyalty among consumers. The Russian menu is similar to that of US McDonald’s except for the addition of cabbage pies and a few traditional food items of the country. The high calorie food and obesity debate has not affected the market segment of McDonald’s in Russia unlike that of United States.

The outlet in Moscow draws 30,000 consumers per day that is one of the highest for any McDonald’s outlet across the globe. A recent survey indicates that the McDonald’s in Russia has 83% market share. The figures reflect a strong and emerging market base for McDonald’s in Russia. McDonald’s started its operations in China in the year 1992 and since then it has expanded to 800 outlets in the country and it currently has the world’s largest McDonald’s. The fast food giant adapted to the Chinese taste buds by offering them beef hamburgers.
This found great acceptance among the consumer base. The stress on beef products is much evident in the advertising promos. But lately the company decided to change menus and offer the American menu of hamburgers and French fries with rice as side dish to cater to local tastes. The company hopes to capture the huge market potential that this country offers by setting up more drive through outlets preferably in the gas stations and highways in the coming years.
The Chinese consumers have shown great affinity for the brand and its growing consumer base is indicative of the huge market potential that this country represents for McDonald’s. India is another country that has extensive market potential with huge untapped areas. The market poses challenges in the form of diverse culture and varying taste buds. The preference for vegetarian dishes and taboo for beef dishes has forced the company to adapt its product offerings to suit the local eating habits.
Separate cooking areas for vegetarian and non-vegetarian food are one such strategic move to appeal to the consumer base. It is estimated that the Asian countries of China and India represent a strong market potential for the company in the light of the fact that the Western countries have reached a saturation point. The company is looking at strengthening their presence in these developing countries by adopting strategic means of adapting to local flavor and setting up supply networks to increase profitability.

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