Fast food chains sweat as apps lure customers

As China's economy stutters, growing numbers of diners on a budget are tapping into smartphone applications to snap up meal delivery deals, spelling big trouble for fast food chains like Yum Brands Inc's KFC and Pizza Hut.

People like Li Jiali, a 20-year-old Shanghai student, say they have all the dining options they need nestling in their phones, without needing to venture out of the house. Yum's shares dived this week after it said it is way behind target in a bid to recover from damaging food scandals in China, its top driver for profit and revenue.

Li's Huawei smartphone is packed with cut-price food delivery apps from some of China's biggest Internet firms, like Baidu Inc's Waimai, Alibaba-linked Meituan and Tencent-backed Ele.me, meaning "Hungry?". These allow thousands of mom-and-pop restaurants to lure diners previously beyond their marketing reach.