Ask AI · How does Qu Cuirong’s bamboo forest-style growth logic drive growth?

Pricing determines life and death.

By | Reporter Liang Xiao from China Entrepreneur

Edited by | Mina

Header image source | Interviewee

Yum China is getting faster and faster.

The financial report released on April 29 shows that this is the largest chain restaurant group in China. In the first quarter of this year, it added 636 new stores, more than double the same period last year, setting a record high for a single quarter. Looking at its two major brands, KFC added 457 net new stores, up 55% year-on-year; Pizza Hut added 207 net new stores, already approaching about half of the net new stores in 2025.

Behind this is Yum China’s continued, in-depth adjustment of its market strategy for its brands. Take Pizza Hut as an example: in 2024, when many brands expected high-end consumption to be on the verge of recovering, Yum China firmly initiated a shift of the brand toward the mass market, which later became the new starting point for Pizza Hut’s counter-cyclical growth. “If we hadn’t made those earlier pricing adjustments, our situation would probably be difficult,” Qu Cuirong said. She added that Yum China’s decision-making was not based on predictions about the macro market—“we’re not that concerned about that”—but rather on the real, on-the-ground feel from within the consumer market: “sticking to our own playbook.”

With more than 20 years of experience in the consumer industry, she first worked at Watsons and joined Yum China in 2014. By now, that period is also the longest stage of her career so far. And she has brought Yum China onto a fast track for growth: compared with 2018, when Qu Cuirong had just taken office as CEO, today Yum China’s total number of stores is 2.3 times that of the end of 2017, revenue is 1.6 times, and operating profit is even higher—3.4 times.

In 2025, Yum China also reached a new performance peak: on the one hand, total revenue exceeding 800 billion yuan, creating a historical high since its spin-off and listing in 2016; on the other hand, full-year operating profit surged to 9 billion yuan, with an operating profit margin of 10.9%. Excluding special items, this is also the highest level in 10 years. Q1 2026 continued the growth momentum—revenue and operating profit increased by 10% and 12%, respectively, and the operating profit margin has kept rising for eight consecutive quarters. According to Yum China’s plan, the total number of stores will exceed 25,000 by 2028, and it will strive to break 30,000 by 2030.

Source: Visual China

“Few people know that before bamboo shoots emerge, the bamboo will take root underground for several years, and its root systems are connected. Once the right conditions come, their growth rate is astonishing—up to 1 meter in a single day.” As a person from Fujian, Qu Cuirong has a strong impression of the bamboo grove right in front of her home during childhood, and she greatly admires this kind of “bamboo grove-style growth logic.”

Now, Yum China is also entering the same kind of explosive growth period.

“Stability comes first”

In 2025, with the subsidy wars between food delivery platforms in full swing, Yum China chooses to “cool down” itself first.

They worked out the numbers carefully—which orders participate in subsidies but do not make money? How do subsidies affect profit? Where is the breakeven point? Only after clarifying these did they begin to implement different subsidy strategies.

“In a complex environment, the most difficult decisions are often the ones involving ‘doing something different’—or rather, ‘choosing to not do it.’” Qu Cuirong said. The 2017 delivery war made her feel this even more deeply. At the time, Pizza Hut threw itself into the fight; sales did surge, but in the following year, as subsidies pulled back, performance also fluctuated.

Source: Interviewee

This time, the battle is still on, but Yum China’s response is more systematic. It not only conducted more cautious assessments of the pros and cons of subsidies, but also carried out a more comprehensive deployment. “For us, we need sales and we need profits, we need the short term and the long term—what we want is to be—stable,” Qu Cuirong emphasized more than once, “Only when we’re stable can we sustain growth. Otherwise, even the fastest business is like building on quicksand.”

“Bamboo grove-style growth”

After entering the Chinese market for 39 years, Yum China has expanded from its initial two brand trees—KFC and Pizza Hut—into a multi-brand ecosystem, including Lavazza (an Italian coffee brand jointly operated), Taco Bell (Mexican-style fast food), Little Sheep, Huang Ji Huang, and more.

Just like bamboo growth depends on an extensive, interconnected root system, what supports Yum China’s continued growth is a persistent enabling big platform—what Qu Cuirong describes as ‘front-end segmentation and back-end aggregation.’

The supply chain is of paramount importance. As one of the earliest restaurant companies to build its own supply chain, today Yum China has already set up 33 logistics centers and a logistics network covering more than 2,500 towns and cities, enabling it to deliver raw materials to nearly 20,000 stores more efficiently and at lower cost. At the same time, by integrating product demand across different brands, Yum China is continuously improving the utilization of raw materials. “With our whole-chicken utilization strategy, we can now use different brand product combinations to ‘assemble’ a chicken,” Yum China’s Chief Supply Chain Officer Huang Duoduo previously explained. “In the future, we hope to ‘assemble’ a cow, a vegetable, a truckload of goods, and a complete logistics warehousing and distribution network.”

Another force driving the aggregation effect is digitalization. Yum China, which began building an AI middle platform in 2019, is currently piloting intelligent agents such as Q Rui, D Rui, and C Rui, to empower three major scenarios: restaurant operations, delivery capacity coordination for takeout orders, and customer service Q&A. With these, stores can not only improve operational and management efficiency, but also further “lighten the load” on restaurant managers. In the future, Yum China will continue to push for deep integration across the supply chain, AI technology, talent recruitment and training, R&D, and other areas.

For Yum China, this is also a “moat” against future competition—integration brings cost advantages, and from there it wins elasticity in price adjustments and proactive pricing initiative. While capturing market incremental growth, it also ensures reasonable profit.

Data show that since 2016, China’s Consumer Price Index (CPI) has risen by 13%, but Pizza Hut has been adjusting prices in the opposite direction. Its average spend per customer dropped from about 110 yuan in 2019 to 69 yuan in Q4 2025. Meanwhile, restaurant profit margins have continued to rise. In 2025, Pizza Hut’s restaurant profit margin was 12.8%, up 80 basis points from 2024.

“Pricing strategy is crucial to our success.” This is what Qu Cuirong has repeatedly emphasized at length at every turn: “Pricing is operations; pricing determines life and death.” These ten characters are also an important “secret” for Yum China to navigate market cycles.

Accelerating the run

Yum China, which has been training its “internal strength,” has also reached the time to showcase its capabilities.

From 1987 to 2020, Yum China used 33 years to open 10,000 stores. In the next five years, the number of stores rapidly surged past 18,000, covering one-third of China’s market population. And according to Yum China’s plan, over the next three years, the net increase in stores will be at least 7,000, and the number of people it serves will exceed half of China’s population.

This is an aggressive goal, but Yum China has already found the key to unlocking future incremental growth markets.

In 2024, KFC launched a small-town store format. Compared with the classic format of 170 square meters and an investment of 1.6 million yuan, the small-town model needs only 100 square meters, with investment costs reduced to 500,000–700,000 yuan. With this, KFC entered more than 400 blank cities through franchising. Pizza Hut also followed a similar approach: its WOW store model reduces investment costs to 650,000–850,000 yuan. In 2025, Pizza Hut entered more than 200 new cities, with about half adopting the WOW model. Driven by this, Pizza Hut added 444 net new stores in 2025, setting a historical record. Qu Cuirong also disclosed that, leveraging the WOW model, Pizza Hut entered more than 100 new towns in the first quarter of 2026.

And based on the advantages of a multi-brand “jungle,” Yum China has begun to push hard for a “shared model.” First, KenVue Coffee and Kenli Light Meals were rapidly rolled out using a “side-by-side with KFC” approach. Later, it also tried a “twin stars” model that combines KFC and Pizza Hut together. In this model, total investment costs per paired store are controlled at 700,000–800,000 yuan, and about 40 such stores were opened in 2025.

As the number of stores is refreshed, revenue and profit targets will be improved in tandem. According to Yum China’s plan, over the next three years, system-wide sales will achieve an average annual compound growth rate in the high single digits to low double digits; operating profit will achieve an average annual compound growth rate in the high single digits to low double digits as well. By 2028, Yum China’s operating profit margin is expected to be no less than 11.5%.

This is also the goal of Yum China’s RGM3.0 strategy. These three letters stand for Resilience, Growth, and Moat. In the 1.0 era (2021–2023), “resilience” was the top priority; in the 2.0 era (2023–2025), “growth” was the strategic focus. Now Yum China is standing at the starting point of 3.0.

“Let’s be a bit greedy this time—we want to ensure all three at the same time,” Qu Cuirong believes Yum China currently has enough capability to balance the three major objectives.

Qu Cuirong understands that China’s consumer market is one of the most volatile and rapidly changing in the world. But she also believes it is one of the markets with the largest global growth potential. Over the past 8 years, as the leader of Yum China, she has guided this largest chain restaurant group in China through many storms. With each hurdle she grows more resolute: “Don’t be afraid of failure—only optimistic people can ultimately win.”