[CC may contain inaccuracies] Obviously, you laid out a quite interesting expansion plan out there.
Q My first question to you is what gives you so much confidence, just given the
macro weakness we've seen in the economy?
Well, when we look back at what we have learned in China since 1987,
it took us 16 years to build 1000 stores.
But then, you know, our pace of acceleration
picked up in the actually last decade a lot.
Right now, we're at 13,600 stores. And while the Chinese economy, the
growth rate actually slowed down from double digit.
And then, you know, now is about mid-single digit.
What really gives us the opportunity to grow very aggressive is the scale, the
sort of scale of the company economy right now is 17 trillion.
For China, economy is about roughly 18% of the global GDP.
So even right now, with 5% of GDP growth of the absolute incremental growth of
the size economy is about 900 billion. To put things into perspective, it's
about roughly two X of the entire Vietnam GDP.
So so the absolute scale of the market give us that opportunity.
And, you know, that's a point one. Point two is if we look at our middle
class customers in China, roughly, they are about 450 million.
And because these are very accessible brand, so and so is Pizza Hut.
And our membership right now is at about 445 million, which roughly the size of
China's middle class. So if we take the glass half empty half
approach, what does it mean for us is there's still roughly a billion of
customers in China who either don't have convenience store to our store or our
price point is still beyond our reach or for other reasons.
So if we look at almost 1 billion customers that we still serve, it would
make sense to to see that why we can pick up the the pace of development much
faster. And internally, of course, right now our
our average cost of investment for each store is a bit lower so we can make it
work. So I hope that gives you the perspective
why this is such opportunity for consumers that in China
you certainly have and I talked about just now, I mean, it's restaurants, it's
catering. I mean, these are still really bright
spots in the economy here right now. If you look at the data, what do you
think are the key drivers of this? And do you think that's kind of
resilient, you know, surging demand that we're seeing when it comes to catering
and that sector can actually sustain?
Then we are talking about the consumers. I mean, there are few trends of consumer
consumption behavior here. One is consumers are definitely getting
more rational with their consumption choice.
So the point of value for money is important is not only the price is also
the quality of the experience of the or the product that that that that worked
for the consumers. And and of course is in China contest
right now. I mean after the last three years
pandemic you know this trend has become ever more
important. So that's point one.
Point two is consumers focusing more on experience, sort of experiential
consumption and and food and dining is certainly one of them.
The other one is tourism. The local tourism is doing quite well in
China, and so is there's a lot of interest in exploring the lower tier
city or interesting cities in China. You know, so so you know, the that the
extra interest to go to a lower tier lower tier city give us more
opportunities to open store in lower tier city as well because we are doing
quite quite well both in top tier city and lower tier cities.