Comeback Story: Taco Bell & Hard Rock Gives Shanghai Another Try

There’s been a lot of talk lately about two huge franchises coming to Shanghai. The first is Taco Bell, which recently opened in Lujiazui to the delight of most nacho-cheese-loving Westerners. And then there’s the new Hard Rock Café, set to open in Jing’an sometime next month. You may be surprised to find out though, that both have come and gone before.

TACO BELL

Old Location:

Taco Bell gave it a shot here in 2003 as a ‘Taco Bell Grande,’ which mixed classic Taco Bell offerings with a range of other Mexican foods. There were two Taco Bells in Shanghai, one in People's Square and the other in Gubei. During that time they also had two locations in Shenzhen, but all four were closed between January and March of 2008.

New Location:

This December Taco Bell got back in the Chinese saddle, opening up a huge store in Lujiazui. In addition to their normal American menu offerings they’ve added a welcomed range of alcoholic drinks like mojitos and margaritas.

Why it might work now: Their strategy seems to be attracting western tourists, which could sustain business as the build a Chinese market for their food. We also got the chance to ask them some questions about the new jump into China, here’s what they had to say

What sort of adjustments has the brand made to ensure success in the Chinese market?

Yum Spokesperson: We conducted a series of in depth focus groups starting in early 2016, and from the insights we gained we fine-tuned the Taco Bell menu for Chinese consumers.

We found that Chinese consumers prefer a hot meal, and we made some adjustments to a number of dishes so that they are warmer. For example, the Crunchy Taco Supreme is now loaded with Taco Bell’s signature Nacho Cheese Sauce, instead of cold cheddar cheese.

We also found that Chinese consumers prefer a more diverse range of sauces, so we introduced the spicy Sriracha sauce to our Volcano Chicken Burrito, and we provide a variety of other sauces so that customers can adjust the flavor to suit their palate.

We also introduced shared platters and a range of really high value combo deals that enable customers to experience a range of dishes as well as share with friends. The response we’ve seen from customers so far has been very encouraging.

Why do you think this time around will be more successful than the original Shanghai Taco Bell grande was in 2003?

Yum Spokesperson: Taco Bell Grande was a very different concept from today’s Taco Bell. It was too early for the market and a relatively premium concept at the time.

Now, we feel the time is right. Taco Bell is an incredibly successful brand that has been rolled out to more than 26 countries with over 300 restaurants in places including the UK, Japan and Korea. The new store allows customers to try freshly made, Mexican-inspired food that is great value with really quick service.

In addition, over the last decade, the China market has become very dynamic and diversified.  Incomes are rising and consumers are open minded and eager to experience different cultures and lifestyles. We are confident that it will resonate well with Chinese millennials.

How difficult is it to walk the line between adapting to local markets and maintaining your original brand and taste?

Yum Spokesperson: Our Taco Bell store and the menu is instantly recognizable as Taco Bell and we will always stay true to the core of the brand. At the same time, understanding your customers and making small adjustments to suit the local market is very important, so the menu will feature globally recognized Taco Bell favorites with locally relevant flavors.

We have close to three decades of experience operating global brands with a Chinese heart, and we are confident that we have the right approach.

HARD ROCK CAFE 

Old location:

Old location: The old Shanghai Hard Rock Café is a mysterious place. It’s hard to find any concrete information on it besides a ton of old, mixed reviews and a couple of grainy photos. What we know is that it opened on August 2, 1996 and was closed March 28, 2004. Hard Rock had a Beijing location as well, which opened on May 14, 1994 and closed September 30, 2012.

Why it didn’t work: If you read through old message boards and news articles there are tons of good reviews, but there are also many which paint it as have low quality food, service and high prices. However, by many accounts (including Hard Rock PR) the Shanghai location didn’t fail, it was doing well and closed for strategic business reasons. It’s also likely that Shanghai simply didn’t have enough customers with western tastes at the time to keep it going. 

New Location:

Their new Space is smack dab in the middle of a lot of other exciting businesses, in a new development called Fengshengli which is next to the West Nanjing metro station. Its neighbors will include several fashion shops, and the enormous new Goose Island Brewhouse. 

Why it might work now:  The Hard Rock is usually a tourist favorite in every country, and they’ll be in a location with tons of those, as well as some local residents who don’t mind spending a little but more than average for a meal and a drink. 

Another aspect to note, the Hard Rock brand was purchased by The Seminole Tribe of Florida in 2007, who have ushered in a new era of success for Hard Rock. Since the acquisition, around 100 new locations have opened up around the globe, and there are 15 new stores set to open during the next year or two (including one in Shenzen and Mongolia). Their size and experience mean that a ton of market research went into the Shanghai Hard Rock, from the menu, to the location, even the sort of events and PR they’ll be doing. 

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