Quanjude eyes younger customers to stay ahead of the competition

Quanjude Roast Duck restaurant, an iconic traditional Peking roast duck chain, is shifting its business strategy by opening more trendy restaurants to attract patrons after a period of decline so it can stand out in the fiercely competitive roast duck market in China.

The 155-year old Quanjude was once the most famous roast duck restaurant chain in China, but it has lost its luster as newcomers have flooded the market. The brand is trying to reinvent itself and attract younger, hipper consumers.

Quanjude will launch its new restaurant outlet at the food area of Beijing Daxing International Airport in late September, when the new airport is scheduled to start commercial operations.

"Unlike our traditional restaurants that provide multiple cuisines for patrons dining out together and formal banquets, the new branch at the airport will be positioned as a comfortable quick meal dining place. It will also offer to-go services of freshly roasted duck for passengers before they board a plane, "Quanjude said in a statement.

The duck chain said it has also reached a cooperation agreement with Universal Parks & Resorts in Beijing, which is under construction and expected to open by 2021. Quanjude said it would like to showcase some stylish features along with its traditional cooking techniques at the Hollywood theme park in the capital.

"For modern catering enterprises, it is fairly important to establish a comprehensive and highly efficient food supply chain. Simple and comfortable restaurants have high requirements of standardization and they cater to the demands of most consumers," said Neil Wang, president of consultancy Frost &Sullivan in China.

"By leveraging the large passenger flows of the new airport and the impact of Universal Studios in Beijing, Quanjude is making some positive and effective attempts by exploring its future growth path, and it would be beneficial for the time-honored brand to rebuild its image," he said.

Quanjude's recent numbers have been weak.

In the first quarter of 2019, Quanjude posted sales revenue of 400 million yuan ($58 million), down 9.57 percent year-on-year. Its net profit during the period reached 10.6 million yuan, plunging 81.32 percent year-on-year, its latest earnings report said.

Quanjude predicted that its sales revenue from January to June 2019 may drop by over 50 percent year-on-year, as the company continues to struggle in the second quarter of the year. The restaurant will keep adjusting its operations to face the challenges and solve the problems, it said in a statement.

"After decades of development and reform, time-honored restaurants are quite unique in the catering sector in the country, and their biggest advantage is their high-profile brand images," Wang said.

"Yet, the brand impact of time-honored brands is gradually waning with the fast growth of modern restaurants and the change in consumer habits. The emerging new catering players in the market have intensified the competition, and some new types of roast duck restaurants have seized the market quickly by online marketing," he said.

"Quanjude is trying to innovate itself by exploring new demand from young consumers and integrating its brand image with fashion and globalization to make the brand glow with new market vitality, "Wang added.

In recent years, Quanjude opened a number of outposts overseas such as in Toronto, Canada, and in Sydney, Australia, seeking to tap the large number of overseas Chinese and local consumers living in those cities. The restaurants offered cuisines that combined Chinese and Western styles.

"We have drawn up new standards to upgrade all of the overseas restaurants, with a reference to Michelin standards. Within five years, we plan to build our overseas branches into highly rated and featured local restaurants," Quanjude said in its statement.