American pizza restaurant chain operator Domino's Pizza Inc remains bullish on its future prospects in China - one of its largest markets outside of the United States. The company's China unit CEO, Wang Yi, noted in a statement that Domino's Pizza will not be adjusting its targets for the year even if sales were somewhat disrupted during the first half.
While other companies are significantly reducing their operations to cut costs, Domino's Pizza is planning to open an additional 100 restaurants in China before the year ends. The company is aiming to bring its total outlets in the country to about 360 restaurants. Wang claims that Domino's Pizza China is aiming to have at least 1,000 restaurants within the next three to five years. Most of the outlets will be set up in first and second-tier Chinese cities.
Domino's Pizza originally entered the Chinese market in 1997. While its expansion may have been slow during its first few years of operating in the country, its growth rate significantly accelerated over the last decade. In the last five years, Domino's China has seen a compound average growth rate of between 30 to 50 percent.
Due to its successful operations in the country, the Michigan-based firm announced in July that it would be making an additional $40 million investment in its Chinese operations. The investment underscores Domino's continued positive outlook for the market, where it has seen significant growth in sales.
Wang noted that other Western-style fast-food restaurants, such as those selling burgers and fried chicken, have been successful in China. She added that Domino's believes that the same logic applies to pizza chains as well. While the company's earnings were initially affected by the spread of the pandemic earlier in the year, Domino's had reported a rebound in its sales during the second quarter.
Domino's popularity and success in China can partly be attributed to its quick adaptation of new consumer trends such as online delivery services. Currently, more than 75 percent of the company's orders in China come from online platforms. A report published by the China Hospitality Association in July showed that more than 460 million Chinese consumers actively order food online. This represents more than half of the country's urban population.
