McDonald's renowned golden arches are about to get even more famous. To expand its reach and improve accessibility, the world's largest hamburger restaurant chain will this year introduce delivery services in Korea, one of the few countries to offer such an advantage.
The decision is part of a strategy to be more convenient to consumers, said Ray Frawley, chief executive of McDonald's Korea.
"Convenience is the key word to strengthen our growth momentum in 2008 and beyond," he said at a news conference held this week to mark the chain's 20th anniversary in Korea on March 29.
The icon of globalization and American culture has managed to achieve steady growth in Korea, a market that has been touting low-fat Asian meals and more healthy choices amid the so-called well-being trend.
McDonald's Korea announced 16 percent growth in 2007, following 10 percent growth the previous year. The double-digit figures follow an expansion of 7 percent in 2005. The company declined to disclose exact figures, citing corporate policy.
According to Frawley, McDonald's Corporation, seeing growth potential in Korea, invested over 160 billion won ($160 million) in 2006, underscoring that the company has had and will continue to play a leading role in the local restaurant industry.
McDonald's Korea said it ranked No. 1 in growth in terms of customer numbers and operating income among the company's 37 markets in Asia, the Pacific, the Middle East and Africa. It ranked No. 3 in comparable sales among the corporation's 199 markets globally, the company said.
Stressing that "many more consumers" in Korea will be able to enjoy McDonald's, Frawley said: "Our delivery service to begin in 2008 is in line with our focus on convenience; we will capitalize on the needs of consumers."
Home-delivery services are currently available in the Asia-Pacific and the Middle East, including Taiwan, Singapore, Indonesia, Egypt and Turkey. Delivery services are introduced based on the needs of each individual markets, Frawley said.
"We look at each market in isolation," he told The Korea Herald, in response to why the service is not available in the United States. "The U.S. market has a huge number of drive-thrus, which provide a level of convenience," he stressed, noting that each market has different growth drivers.
"The delivery service in Korea is ingrained in the culture," he added.
Since last October, the company has been conducting pilot tests for its delivery service at branches in southern Seoul and Suwon.
"Based on positive feedback and business performance, McDonald's Korea is confident that McDonald's delivery service serves a growing customer need," Frawley said.
The company will steadily expand the service, which will be available around the clock, this year.
Previous convenience-centered strategies introduced by the local unit are 24-hour operations and steady introduction of drive-thru stores, or the McDrive. To cater to a society growing more open to a Western lifestyle, McDonald's in 2006 introduced its McMorning menu, featuring original hotcakes, egg McMuffins and hash browns.
"Our McDrive and 24-hour services have been introduced to meet the busy lifestyles of today's working professionals," said Chun Jin-wook, development director of McDonald's Korea. "A lot of working people set out early in the morning, and some work into the night."
Taking on board the ongoing well-being trend, McDonald's introduced healthy choices like salads and the Okok shake, a Korean-style milkshake made of grains. It also offers a healthy kids' menu.
As perhaps the best-known restaurant chain in the world, the American cultural icon is often scrutinized for the quality of its food preparations, ingredients and business practices.
The U.S. food giant has therefore been sensitive to criticism and quick to respond to consumer needs worldwide.
"We are not a fast-food restaurant but a quick-service restaurant," Frawley emphasized.
He noted that McDonald's around the world practices the highest food-safety procedures and offers the highest quality.
"Our food safety starts at the farm," he said. "We're confident about our food safety, which exceeds the standards of the Korea Food and Drug Administration, and most countries' laws and regulations," he added.
Amid all the global controversy over trans-fatty acids, which are said to raise cholesterol levels, and fast-food companies using cooking oil containing animal fat, McDonald's Korea said it has replaced its cooking oil with pure vegetable oil and uses only pure beef.
In August 2007, it introduced French fries with zero percent trans-fatty acids. TFAs are commonly associated with vegetable shortening, margarine, and snack foods like crackers and cakes, as well as fried foods.
While it caters to children with the orange-haired clown Ronald McDonald, the company has also tapped mature consumers with healthy food options and its Lavazza coffee line.
McDonald's has caught on to the global trend for high-quality coffee and coffee joints. The Korean market is also enjoying a boom.
The introduction of the McCafe, a cafe-style accompaniment to the restaurants, in December 2005 here has been warmly received. The popularity of take-out gourmet coffee, triggered by Starbucks with its entry in 1997, has spawned a large population of coffee aficionados.
Frawley said McDonald's has been recording double-digit growth in this sector as well.
Unique to the Korean market, and underscoring the popular demand, are the McCafe walk-up kiosks.
"The walk-up window here is the first in the world; this is another important milestone for McDonald's Korea," Frawley said. "Our customers have responded very positively to our efforts since 2005. Our future in Korea is very strong, and the plans we have in place will continue to drive our business."
The local unit plans to add 10 new stores this year, taking its total number of restaurants to 240.
As part of its efforts to contribute to Korean society, the company has been supporting children's welfare and health needs since its entry in 1988. Some of its activities and programs include raising funds to support children's charities, and operating Ronald McDonald Soccer Clubs for local school students to promote a balance and active lifestyle. Last year, the Ronald McDonald House Charities, a nonprofit organization, was established in Korea, making it the 51st country to host a local chapter.
As part of the food giant's commitment to children, McDonald's Korea recently agreed to partner with the Korea Olympic Committee for the 2008 Beijing Olympic Games. The McDonald's Champion Kids' program will allow up to 20 Korean kids to take a four-day trip to the Beijing Olympics from Aug. 16 to 19.
"We will support future Olympic hopefuls by sending 20 kids to experience the 2008 Olympic Games," Frawley said.
By Yoo Soh-jung
(sohjung@heraldm.com)
2008.04.11
Summary>
McDonald’s will introduce delivery services in Korea this year. The decision is part of a strategy to be more convenient to consumers. Home-delivery services are currently available in the Asia-Pacific and the Middle East, including Taiwan, Singapore, Indonesia, Egypt and Turkey. On the other hand, the U.S. market has a huge number of drive-thrus, which provide a level of convenience, so the service is not available in the U.S. Delivery services are introduced based on the needs of each individual markets and the culture.
Opinion>
No matter McDonald’s makes itself easy to access, comfortable, fast and available at cheap price, it will be limited to growth. Now, the difficulty it has is the customers’ thoughts that McDonald’s is bad for health. Although McDonald’s has several advantages, customers hesitate to go and to eat there because they think its hamburgers are bad for health. Especially, Koreans, who are much interested in their health, hesitate much more than others. So, McDonald’s started to sell Okok shake made of grains and salads. But, it seems that they couldn’t help McDonald’s to improve their unhealthy image. Because customers go McDonald’s to eat hamburger, not shake or salads.
Then, how can McDonald’s improve their image? One way is advertising that McDonald’s uses pure beef in its hamburgers. Before I watched the commercial, I felt that Big Mac is tasteless because its beef. And now, it is good. But if McDonald’s just advertises, it is obviously swindling. They have to try to improve their product’s quality.
If McDonald’s makes itself easy to access, it will be hard to success in the market. Improving the quality of hamburgers and advertising it will accelerate the rate of growth.
20600613 Jeon, Hyejin
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